Greed Air

by LEE SUSTAR

Enron gone, but the great CEO looting spree is still going strong–and airline bosses are leading the way.

Less than two years after top Enron executives shocked the world by cashing out stocks as their employees’ retirement funds evaporated, American Airlines has gone even further to line their pockets at workers’ expense.

While demanding that unions must take $1.8 billion in concessions, or the company would file for bankruptcy, American CEO Donald Carty and 44 other top officials created a special trust fund that will protect their retirement pay even if the airline goes bust.

The details only emerged after American’s unions voted to take pay cuts, ranging from 23 percent for pilots to 15.6 percent for flight attendants "The concessions our members barely ratified the other day were based on the premise of shared sacrifice," said Jim Little, an official of the Transport Workers Union (TWU), which represents 34,000 mechanics and ramp workers at American.

TWU members and flight attendants narrowly approved $600 million in takebacks–only to find out about the executives’ money-grab afterward. "This [executive retirement] fund is the opposite of shared sacrifice and calls into question the basis of each of our contracts," Little said. It was only because of legal requirements to file papers on the deal with the federal government that American bosses had to own up to the rip-off.

In an effort at damage control, CEO Carty promised that he wouldn’t accept pay bonuses this year. Yet when it came to the bankruptcy-proof retirement fund, Carty and the rest of the American bosses refused to budge. As Socialist Worker went to press, union officials were threatening to block the deal unless Carty backs down.

The pension rip-off at American is part of a smash-and-grab strategy by executives across the airline industry, which has lost 100,000 jobs since the attacks of September 11, 2001. While executives blame the hijackings, the fact is that the industry built up huge amounts of extra capacity and a crazy price system–both results of industry deregulation and the mad scramble for profits.

Now that the airlines are hemorrhaging cash, executives are stuffing their pockets while they can–and rolling back years of gains by unions. Delta Airlines, for example, lost $1.3 billion last year. But that didn’t prevent CEO Leo Mullin from enjoying a 104 percent raise, bringing his total compensation to $13.8 million. Now Mullin wants concessions from workers–but has tucked away $25.5 million in Delta’s own cash trust fund to guarantee pensions to top executives, just like American.

At Continental Airlines, CEO Gordon Bethune bagged $14.7 million last year, a 172 percent increase over last year. Meanwhile, some 1,200 jobs at Continental will be eliminated this year as part of a plan to slash $500 million in costs.

For its part, US Airways used the pressure of bankruptcy court to turn its pilots’ pensions over to the federal government’s Pension Benefits Guarantee Corp. That saved the company $700 million over the next six years–by slashing annual retirement benefits from an average of $50,000 to $70,000 to a maximum of $28,500 a year for a 60-year-old retiree.

At United Airlines, also in bankruptcy, pilots recently agreed to concessions worth $1.1 billion, and mechanics and flight attendants are set to vote on further givebacks on April 29 that, if approved, would give United $2.5 billion in concessions. United CEO Glenn Tilton has agreed to cut his base pay of $828,500 by 14 percent in a supposed show of solidarity. But considering that Tilton got a signing bonus of $3 million, he won’t feel much of a pinch.

The story is similar at Northwest Airlines, where management announced 4,900 job cuts over the next five years when the Iraq war began–and then demanded mechanics take a pay cut and agree to the elimination of an additional 1,000 jobs.

This is an outrage. All the CEO demands for wage and benefit cuts to "save" companies is a pretext. They want working people who were cut out of the boom to pay the price now–so the employers can keep their wealth and power intact. We can’t let them get away with their rip-off.

LEE SUSTAR writes for the Socialist Worker. He can be reached at: lsustar@ameritech.net

Like What You’ve Read? Support CounterPunch
Weekend Edition
July 31-33, 2015
Jeffrey St. Clair
Bernie and the Sandernistas: Into the Void
John Pilger
Julian Assange: the Untold Story of an Epic Struggle for Justice
Roberto J. González – David Price
Remaking the Human Terrain: The US Military’s Continuing Quest to Commandeer Culture
Lawrence Ware
Bernie Sanders’ Race Problem
Andrew Levine
The Logic of Illlogic: Narrow Self-Interest Keeps Israel’s “Existential Threats” Alive
ANDRE VLTCHEK
Kos, Bodrum, Desperate Refugees and a Dying Child
Paul Street
“That’s Politics”: the Sandernistas on the Master’s Schedule
Ted Rall
How the LAPD Conspired to Get Me Fired from the LA Times
Mike Whitney
Power-Mad Erdogan Launches War in Attempt to Become Turkey’s Supreme Leader
Ellen Brown
The Greek Coup: Liquidity as a Weapon of Coercion
Stephen Lendman
Russia Challenges America’s Orwellian NED
Will Parrish
The Politics of California’s Water System
John Wight
The Murder of Ali Saad Dawabsha, a Palestinian Infant Burned Alive by Israeli Terrorists
Jeffrey Blankfort
Leading Bibi’s Army in the War for Washington
Geoffrey McDonald
Obama’s Overtime Tweak: What is the Fair Price of a Missed Life?
Brian Cloughley
Hypocrisy, Obama-Style
Robert Fantina
Israeli Missteps Take a Toll
Pete Dolack
Speculators Circling Puerto Rico Latest Mode of Colonialism
Ron Jacobs
Spying on Black Writers: the FB Eye Blues
Paul Buhle
The Leftwing Seventies?
Binoy Kampmark
The TPP Trade Deal: of Sovereignty and Secrecy
David Swanson
Vietnam, Fifty Years After Defeating the US
Robert Hunziker
Human-Made Evolution
Shamus Cooke
Why Obama’s “Safe Zone” in Syria Will Inflame the War Zone
David Rosen
Hillary Clinton: Learn From Your Sisters
Sam Husseini
How #AllLivesMatter and #BlackLivesMatter Can Devalue Life
Shepherd Bliss
Why I Support Bernie Sanders for President
Louis Proyect
Manufacturing Denial
Howard Lisnoff
The Wrong Argument
Tracey Harris
Living Tiny: a Richer and More Sustainable Future
Kollibri terre Sonnenblume
A Day of Tears: Report from the “sHell No!” Action in Portland
Tom Clifford
Guns of August: the Gulf War Revisited
Renee Lovelace
I Dream of Ghana
Colin Todhunter
GMOs: Where Does Science Begin and Lobbying End?
Ben Debney
Modern Newspeak Dictionary, pt. II
Christopher Brauchli
Guns Don’t Kill People, Immigrants Do and Other Congressional Words of Wisdom
S. Mubashir Noor
India’s UNSC Endgame
Ellen Taylor
The Voyage of the Golden Rule
Norman Ball
Ten Questions for Lee Drutman: Author of “The Business of America is Lobbying”
Franklin Lamb
Return to Ma’loula, Syria
Masturah Alatas
Six Critics in Search of an Author
Mark Hand
Cinéma Engagé: Filmmaker Chronicles Texas Fracking Wars
Mary Lou Singleton
Gender, Patriarchy, and All That Jazz
Patrick Hiller
The Icebreaker and #ShellNo: How Activists Determine the Course
Charles Larson
Tango Bends Its Gender: Carolina De Robertis’s “The Gods of Tango”