NEWS: United Airlines Pension Deal Details Emerge
Further details emerged today regarding United Airlines' plan to dump their pension plan onto the Pension Benefit Guaranty Corp.(PBGC). Everybody take a seat because nearly every number in this deal involves the word billion...I don't want anyone getting dizzy. Seems the deal hinges on United giving the PBGC $1.5 billion in "securities" once they emerge from bankruptcy. I'm not even going to try and understand how getting $1.5 billion in United notes and preferred stock is a fair trade for taking on a pension plan that is $10 billion underfunded. Then there are those tricky words "if they emerge from bankruptcy". But the numbers certainly work for United.
United officials are calling this agreement the "linchpin" in their efforts to get the $2 billion dollars they need to finance their exit from bankruptcy. Some say that number could go as high as $2.5 billion but the Airline Reality Distortion Field makes that seem not so bad...$2 billion, $2.5 billion, hey, what's $500 million between friends anyway.
The immediate effect is that United looks to save $1.3 billion (there's that word again) in 2005 alone by passing their pension plan off to the PBGC. That number will climb to $4.4 billion in savings over the next 6 years.
OK, everybody is free to get up again but please do so slowly.
United officials are calling this agreement the "linchpin" in their efforts to get the $2 billion dollars they need to finance their exit from bankruptcy. Some say that number could go as high as $2.5 billion but the Airline Reality Distortion Field makes that seem not so bad...$2 billion, $2.5 billion, hey, what's $500 million between friends anyway.
The immediate effect is that United looks to save $1.3 billion (there's that word again) in 2005 alone by passing their pension plan off to the PBGC. That number will climb to $4.4 billion in savings over the next 6 years.
OK, everybody is free to get up again but please do so slowly.
posted by The ACK at
22:16
