If union appeals of the decision fail, the pensions will be turned over to the federal Pension Benefit Guaranty Corp. (PBGC), the government’s pension insurer. This will mean substantial cuts in pension benefits for 120,000 United employees and retirees.

At the same time, United Airlines is moving to throw out union contracts and impose cuts in wages and benefits of baggage handlers, agents, and supply clerks represented by the International Association of Machinists (IAM), and mechanics and cleaners who are members of the Aircraft Mechanics Fraternal Association (AMFA). The company has asked the bankruptcy court to rule in favor of this move.

Officials of the airline unions have used the company’s bankruptcy reorganization proceedings and the court rulings to claim their hands are tied, to point the blame at the government instead of where it belongs—the airline bosses, and to argue that concessions are needed to save “our company.”

AMFA has already announced a tentative agreement with United for a five-year contract with $96 million in wage and benefit cuts. It is now to go before the membership for a vote. “Our choice is to consent to concessions from the company or risk even worse terms imposed by the bankruptcy judge who has shown a proclivity to agree to company demands,” wrote AMFA national director O.V. Delle-Femine in a May 16 letter on the agreement.

On May 10 hundreds of United workers and retirees protested the company’s attacks outside United’s maintenance base in San Francisco. The union officials had distributed signs held by a number of union members. They said, “U.S. Government: Hands Off My Pension.” As word of the judge’s decision on the pensions was passed down the line, Peggy O’Neal, a mechanic and member of AMFA, expressed the feelings of many. “Bankruptcy is the best thing happening to these companies to move against us,” he said. “It’s going to spread. Delta will want it. Other airlines. Maybe even General Motors.”

The ruling, which clears the way for the largest default in the 31-year history of the PBGC, made headlines across the country. Pointing to the $30 billion in losses by the airline industry since 2000, an article in the May 11 New York Times spoke of “a domino effect as other airlines are forced to seek bankruptcy protection to bring their pension costs down to United’s levels.”

A growing number of airlines have filed for bankruptcy in recent years. During a second bankruptcy reorganization in February, US Airways terminated its pension plans. As a result, some retirees have seen benefits drop by as much as 50 percent. In 2003 American Airlines used the threat of bankruptcy to wring $1.8 billion in wage and benefit cuts from its workers.

Workers at United, US Airways, and other companies where pensions are on the chopping block are now reaping the reward of the failure of the union officialdom coming out of World War II, and in the decades afterward, to fight for what was needed—a social security system that includes guaranteed pensions for all and lifetime, government-guaranteed, universal health care for everyone in this country. Instead, the union tops channeled the struggle toward “fringe benefits,” pensions and medical plans that were contingent on the profits of the boss you worked for and negotiated on a company-by-company basis.

During better economic times this approach worked for some layers of the working class. But with a deepening world economic crisis, fueled by falling profit rates and increased competition among the capitalist companies, the bosses are beginning to throw out union contracts, cut wages, and eliminate “fringe benefits.”

The fraud of the Employee Stock Ownership Plan at United, agreed to by the IAM in 1994, was another consequence of the union officialdom’s identification of the workers’ interests with those of the company. Workers were told they were part of an “employee-owned airline,” and in lieu of wages they were given stock, which later became almost worthless.

When profit margins shrank, it became more obvious who the real owners of United are, as the billionaire stock and bondholders were first in line to be paid while the workers got the axe. Through this experience workers are finding there is no such thing as “equal” sacrifice between workers and bosses under capitalism, a system based on the profit needs of the capitalists.

Since United declared bankruptcy in 2002, UAL workers have given up $2.5 billion a year in concessions. The number of employees has declined from 100,000 to 62,000, with many jobs being “outsourced” to contractors. Now the company says it needs another $725 million a year in concessions, in order to get the loans it needs to emerge from bankruptcy.

Officials in all the airline unions have called on workers to once again accept cuts to save United. The unions representing pilots and flight attendants have already agreed to concession contracts. The IAM is still in negotiations.

“We are keenly aware of United’s financial situation and we acknowledge the need for additional sacrifice,” wrote IAM District 141 president Randy Canale in a letter to union members May 17.

This line of the labor tops has derailed workers’ willingness to fight. In January, after voting by a margin of 57 percent to reject a tentative agreement negotiated with the company, AMFA members passed a measure to authorize a strike by 85 percent. On May 11, IAM officials said that in a recent vote 94 percent of IAM members voted in favor of authorizing a strike.

Many of the protesters at the maintenance base said that if a new agreement does not include more protection against outsourcing of their jobs, they are ready to strike. Alfredo, a mechanic with 20 years seniority who faces huge cuts in his pension, said, “No matter what, the future looks bleak. I don’t want to strike, but if we do, I’ll go for it.”  
 
 
Front page (for this issue) | Home | Text-version home