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Old 12-22-2011, 02:52 PM   #141
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This is like saying that it's the woman's fault she was raped........ "she lacked the backbone to prevent it!" Or the shop owner who was robbed and beaten brought it upon herself by not being properly armed and trained in self-defense.
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pb4uski......

Are you actually in a current situation involving union negotiations? Or is this just hypothetical at the moment? If you are, is it in a private sector setting? industrial?

Although I retired from a non-union, industrial setting, I spent a number of years managing in an industrial, unionized setting and have been through three major strikes, two with Steelworkers (USW) and one with Teamsters (1970's). The last strike did in fact result in closing the plant and led to my eventual employment with the company from which I retired.

I'd love to know more about your situation. If you're uncomfortable discussing via post, feel free to PM me.

I admire your do the "right thing" despite it being the "hard thing" attitude, but understand that appropriate and possible actions are situational and sometimes "taking the bullet" isn't as successful or satisfying as you might imagine.
youbet, no it was a totally hypothetical situation. Some posters were suggesting that managements had no choice but to agree to benefits advocated by unions that ultimately were, IMO, a significant factor in some automakers and airlines going bankrupt. While I agree that they had a number of poor choices to chose from, I was suggesting that managements too often took the short-term easy way out rather than the more difficult and controversial long-term right thing for all their stakeholders (shareholders, debtholders, customers, employees, suppliers, etc).

I'll freely admit that hindsight is 20/20 and the easy way out is compellingly attractive in many real-life situations (especially if you know that you won't be around when the stuff hits the fan) but if you value your legacy at all you need to stay principled even though it is very hard to do.
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Old 12-22-2011, 03:26 PM   #142
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We kinda got away from the public pensions, to corporate pensions/management. Since the subject of this thread was public pensions, I'll bow out of any further corporate discussion.

I'm not saying the points aren't worth discussing, and I don't mind tackling the subject, but I do think it should be in another thread. This one has already got pretty long just trying to deal with public pensions.


-ERD50
I agree we have been sidetracked a bit, but many of the themes of the problems with public and corporate pensions are similar in that decisions were made not considering or appreciating the full extent of the cost, the cost was not properly funded, pensioners relied on what they were promised in their financial planning, the combination of overpromising and underfunding is a problem and it is unclear exactly who will bear the financial consequences.

However, it seems clear the management, politicians and union officials who negotiated these deals are not going to bear the consequences of their problems as much as pensioners and taxpayers and share/debtholders will.
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Old 12-24-2011, 06:22 PM   #143
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many of the themes of the problems with public and corporate pensions are similar in that decisions were made not considering or appreciating the full extent of the cost
You may be a bit naive in regard to this. Or perhaps I'm just reading it that way. Leadership in both the public and private sectors has participated in decisions leading to the eventual downfall of the pension plan or even of the enterprise itself. They allowed (caved in to might be a better expression) agreements that they could predict would not be sustainable in the long run. But change is part of life. Companies fail. Governments fall. Pension plans crumble. Ask the folks at UAL who are now collecting benefits from the gov't pension insurance fund. There is no obligation on the part of public or private sector leadership to make all decisions based on the goal that their organization will survive, as-is, for eternity. Thus UAL conceded what it felt it had to to survive without a crushing strike, eventually went bankrupt and now has re-emerged with a new pension situation and labor agreements. That strategy has likely been more successful than taking a lengthly and crushing strike that would have likely caused the bankruptcy sooner or caused them to fall to a distant third or fourth place for decades.

Of course, we'll never know for sure. But my point is, don't think for a minute that public or private sector leadership isn't aware that their current behaviors might dramatically change the future of their enterprise. If Illinois goes bankrupt a decade from now, the politicians who made the pension promises and who failed to fund them will be happily retired on the beach sipping drinks with umbrellas. A new government of some sort will be formed. Life will go on. They aren't nearly as concerned about the eternal existence of the "organization" and about keeping promises as you might think.
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Old 12-25-2011, 07:13 AM   #144
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Originally Posted by youbet View Post
You may be a bit naive in regard to this. Or perhaps I'm just reading it that way. Leadership in both the public and private sectors has participated in decisions leading to the eventual downfall of the pension plan or even of the enterprise itself. They allowed (caved in to might be a better expression) agreements that they could predict would not be sustainable in the long run. But change is part of life. Companies fail. Governments fall. Pension plans crumble. Ask the folks at UAL who are now collecting benefits from the gov't pension insurance fund. There is no obligation on the part of public or private sector leadership to make all decisions based on the goal that their organization will survive, as-is, for eternity. Thus UAL conceded what it felt it had to to survive without a crushing strike, eventually went bankrupt and now has re-emerged with a new pension situation and labor agreements. That strategy has likely been more successful than taking a lengthly and crushing strike that would have likely caused the bankruptcy sooner or caused them to fall to a distant third or fourth place for decades.

Of course, we'll never know for sure. But my point is, don't think for a minute that public or private sector leadership isn't aware that their current behaviors might dramatically change the future of their enterprise. If Illinois goes bankrupt a decade from now, the politicians who made the pension promises and who failed to fund them will be happily retired on the beach sipping drinks with umbrellas. A new government of some sort will be formed. Life will go on. They aren't nearly as concerned about the eternal existence of the "organization" and about keeping promises as you might think.
I guess we'll have to agree to disagree on naivety.

The crushing strikes that you refer to affect union members just as hard as employers so after a bit of time the union members who have mortgages to pay and mouths to feed are just as eager to get things settled and move on as the employer is. There is no upside for either party in an employer going bankrupt, particularly for private enterprises and their shareholders and debtholders. No C-suite executive wants to have leading a company into bankruptcy on their resume or having bankruptcy pinned to actions during their tenure.

You may have a point that it is easier for public leaders to cave in to union demands in that they know the organization will survive but I suspect even for them they don't want to see their legacy tarnished - but I may be wrong - they may not give a care.

I think we do agree that the problems are, at least in part, the result of leadership caving in to union demands that created a high risk of ruin for the organization. What we have different views on is whether the risk of ruin was the result of neglect or foolishness.
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