The government should guarantee the AC pension plan, and I'll tell you why.
Since it is such a concern for some of you people that the wages are so high for the AC employees, how much do you think they are paying in taxes to the government off their paycheques? 50%, probably right?
That is money that they will never see back from the government as they may just get a few months EI out of the deal when they retire, they will never see the money that they are paying into Canada pension and Old Age Pension, provided the company plan is intact. They will make too much as it is clawed back past a certain amount of company pension.
Now if the company goes under all the employees that would have had a company pension will be able to collect the CPP and OAP, the money is gonna come out of the government anyways.
This could be a win win solution as the money already exists from the taxpaying employees and it could be available till the AC pension plan can be made to work with a revamped profitable company.
All the government would have to do is set aside the guarantee.
But they probably dont have any left after the other fiascos they're involved with.
I would rather see my tax dollar set aside this way than put into another Liberal party hack.
grouchy wrote:
1) how much do you think they are paying in taxes to the government off their paycheques? 50%, probably right?
2)That is money that they will never see back from the government as they may just get a few months EI out of the deal when they retire,
3)they will never see the money that they are paying into Canada pension and Old Age Pension, provided the company plan is intact.
4)They will make too much as it is clawed back past a certain amount of company pension.
5)I would rather see my tax dollar set aside this way than put into another Liberal party hack.
1) Most citizens contribute 50+% into taxes. Why should A/C employees be different again???
2) They'll get all the months of EI they're entitled too just like everyone else. Retiring and EI aren't related issues..
3) CPP is ADDITIONAL income to your RRSPs and Pension Plans.. I know folks parents that are bilking CPP because they have amazing accountants.. Don't be naive they'll get every penny they put into CPP.
4) I think your fourth point is identical to your third, you believe their CPP will be scaled back because of the "promised" pension plan, A. if they don't get a pension plan they won't have CPP clawed back, and B. it's a supplemental income.
5) ROFL, I don't think CPP will be around for half the posters on this board, in 30 years. I have no sympathy for anyone who's getting free money. But you're correct, I'd rather have spent a billion dollars on something useful instead of a gun registry.. But I wouldn't want MY tax dollars going to their pension, they can collect CPP like everyone else and cash their RRSPs.... I'd rather get a TAX REFUND! And I'm not voting for the liberals again. Hopefully, trillion dollars and scam after scam some other morons will stop voting for the fiberals too.
N2 said
"I have admit that is the poorest argument I have seen for a long time."
Well refute it then.
Our fantastic government has been bilking us for years on the new liveried "EI" (what did that cost us). Last I heard there was somewhere around 8 billion $ sitting there.
If (lets use a figure of 20,000 AC employees and related industries) are put out of work that money will have to be paid out in EI anyways. (Does anyone know what the real number is?)
cyyz said "Retiring and EI aren't related issues."
Yes you are right but they have been paying a premium for years to a fund that keeps growing. What is that money doing just sitting in the governments hands in the EMPLOYMENT Insurance fund, shouldn't it be used to keep people working?
"Don't be naive they'll get every penny they put into CPP."
Well it depends how you want to look at it. They may get their CPP but if they make too much it'll be taxed back by the government ( the real greedy bastards in all this).
Now for the big question cyyz, what prompts you to have such a hatred on for AC?
A) Are you actually Milton and you're pissed you aren't going to get your 20 mill?
B) Did AC not hire you and you're still pissed?
C) Did your father work for Canadian and you were born into the hatred?
D) You still live in your parents basement and you have nothing else to be bitter about?
I'm just trying to figure out where you are coming from.
Well Grouchy if you're going to do that for AC then why not do it for the tens of thousands in the tech sector and a ton of other occupations that saw their positions eliminated over the past few years? Let’s grind the whole economic machine of this country to a halt. Why should AC be treated any differently than the average taxpayer? Lots of people in this country have contributed large amounts of cash into taxes but do you see them getting preferential treatment? Where were all the Air Canada employees screaming for Nortel, Corel or IBM employees that lost their jobs to be bailed out? There are hundreds of thousands out here that are just as important to the economic well being of this country as Air Canada, yet I don’t hear anyone screaming to have the taxpayer prop them up.
No way, they have been a money losing company for some time and it’s about time they either turned it around or let it die. Besides I was just watching the news and the machinists union was shooting off at the mouth about how much cash the airline has on hand so they really don’t need the taxpayers support, right?
In all honesty I think AC might be in for a rougher ride now that Li has basically said he's walking if anyone else steps up to the plate. Potential investors are going to be looking more carefully at the operation, after all the Li's didn't get to the point they are at now by making stupid business ventures. So if they pulled out I would think the red flag is flying high on the pole to other investors, wouldn’t you?
Sounds like you think because their name says Canada in it the tax payers have a duty to prop up a failing venture. It will be a short term disruption to the air travel industry in this country but the airline (or airlines) that replaces AC will be a much more efficient operation by far. AC, too good for too long and just like spoiled kids they want it all.
From what I am reading I think there is some misunderstanding on AC’ pension plan.
By ERIC REGULY
Saturday, April 3, 2004 - Page B2
"Air Canada took a big step toward oblivion last night when Victor Li's Trinity Time Investments said it's ready to walk away from the airline. The announcement was a threat, of course, but it was a real one because Mr. Li and most of the unions evidently inhabit different planets. "Air Canada's organized labour structures impair its ability to succeed," Trinity said.
Trinity was referring mostly to Air Canada's pension plan. The Canadian Auto Workers and other unions might not believe this, but unless the pension plan is fixed, the airline is dead, dead, dead. Think of it this way. When the airline emerges from bankruptcy protection -- no certainty now that Mr. Li's proposed $650-million investment is highly doubtful -- it will have about $7-billion of assets. The pension plan will have about $9-billion, less the $1-billion or so Air Canada owes it. So the pension plan will be bigger than the airline.
So what? The point is a plan of that relative size, whether fully funded or not, will always hang like Damocles' sword over the airline. It is no exaggeration to say the pension hole made Air Canada's crash landing in bankruptcy court a year ago inevitable. It is equally no exaggeration to say that, unfixed, the plan could come back to destroy Air Canada again and again.
The airline and the defined-benefit plan rise and fall together. When the economy is in the tank, the airline loses money as the business traveller disappears and the back-of-the-bus passenger demands ultracheap flights. A lousy economy also means the pension plan returns go into the tank. At the same time, the airline's deep losses mean it doesn't have the ability to fill the pension hole. And so on. The best way to eliminate the mutual-suicide pact is to switch from the defined-benefit plan, which offers guaranteed retirement benefits, to a defined-contribution plan, in which the benefits depend on the performance of investments financed by regular employee contributions. This is what Air Canada, Mr. Li and any other potential investor want.
Most of the unions, notably Buzz Hargrove's CAW, aren't buying the idea. The union wall did crack this week, but not enough to keep Mr. Li interested. District Lodge 140 of the International Association of Machinists and Aerospace Workers (IAM), which represents 11,500 Air Canada employees, reached a tentative agreement with the airline to allow the workers to switch to a defined-contribution plan. If other unions had followed the IAM's lead, Air Canada's exodus from bankruptcy protection would have been all but certain.
The pension stalemate has emerged as the biggest potential Air Canada killer. The problem is that the CAW, another big Air Canada union, may still refuse to negotiate even though Mr. Li is on the way out. It, like the United Steelworkers in the Ivaco case, thinks the bankruptcy courts are being manipulated to attack workers and retirees. The CAW is worried about setting a precedent. If it bends at Air Canada, other companies with CAW employees might demand similar treatment.
The CAW and the other holdouts have to reconsider their strategy of intransigence. The first point, demonstrated yesterday, is that Mr. Li doesn't need the Air Canada investment. He has no emotional ties to the company, or the country for that matter. He is the son of Li Ka-shing of Hong Kong, one of the world's wealthiest businessmen. If Air Canada doesn't work out for him, then something else will.
The second point is that if Mr. Li walks, a replacement investor (assuming one emerges) would demand similar concessions from the union, not just on the pension, but on wages and work rules too. Anyone who thinks Cerberus Partners, which competed with Mr. Li to buy into Air Canada, would be a kindler, gentler investor is wrong. Cerberus is a vulture fund. It is inconceivable that it would bend on the Air Canada pension front.
The third point is that $850-million in cost savings the unions say are coming have to be put into context. Most of the savings come from forgone wage increases and work rule changes rather than actual wage rollbacks (although the pilots are suffering on that front). So, in the end, the figure is not as painful as it looks.
That leaves the pension. There is no option but to fix it. If it's not fixed, the airline could easily go into liquidation. If it's only partly fixed, Air Canada's ability to tap the stock markets for capital will be compromised. Smart investors wouldn't hold the shares knowing the pension plan could bite the airline at any time.
The CAW's gamble is highly risky. If it fails and Air Canada disappears, WestJet and other carriers wouldn't soak up one-quarter of the workers. If Mr. Li makes good on his threat, a new investor might demand even more blood. Air Canada has made remarkable restructuring progress so far. It has one last chance to get it right. Guaranteed pensions are great for workers, but they have to go if the new Air Canada is to thrive.
Ok so that piece is a little long, to summarize. “The biggest road block is the way the plan is set up. At the present time the plan is set as a defined –benefit plan, which offers guaranteed benefits depending on the years worked for the company. What most investors would like to see is the plan to change to a defined contribution plan, in which the benefits depend on the performance of investments financed by regular employee contributions”
One of the other things the article mentions is the fact the CAW union is worried that about setting a precedent with Air Canada, that other companies might follow. (AC is not the only company with pension woes http://www.theglobeandmail.com/servlet/ ... /Business/ ) The CAW is looking out for the best interest of the Union not necessarily the best interest of the Air Canada employee. Any major investor into AC will be asking for the same concessions or more now that Li has walked away from the table. My thoughts would be that I would rather have a job and some sort of pension versus no job and no pension.
Like I said before, it was a happy day for me when I quit the CAW. Idiotic to be playing this type of game at a time like this.
Speech…speech!
“Stand up, be proud brothers, we are united in our resolve not to let AC and the evil empire defeat us. We will not sway in our demands, we will fight until the bitter end….. Full pay to last day!
In closing I would like to remind each of the brotherhood not to forget to pick up their food stamps on the way out and last one out please turn off the lights.”
Lets face it folks, the pension crisis is not a crisis that employees had a hand in. Companies simply decided against setting aside the huge amounts of money required and used it for daily operations instead. I can appreciate the hard-nosed capitalist view, but I also find it to be unfair to employees considering their employer's negligence. The government, who should probably have taken more of an active roll in supervising that this type of stuff does not go on (in the same way that they supervise the banks to make sure that they don´t overextend themselves on loans), is hoping that the wash will somehow still come out clean. I am not optimistic enough to believe that this will happen, nor, for that matter, that Air Canada will survive.
Could the Federal Government bail-out employee pensions? In and by itself, I say why not? After all, the Airline industry does represent an esential service-- there is evidence of this when governments legislate striking airline employees back to work. However, I wonder whether a satisfactory resolution of the pension issue is all that stands between AC's salvation and it's current state of affairs. For that reason, I can also understand why a government would be hesitant to throw money into what appears to be a vacuum.
Overall, a very sad state of affairs not only for Air Canada and it´s employees, but the Canadian aviation industry as a whole.
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Maybe you guys should go re-read the thread posted here on how completely inaccurate the media is when reporting aviation related events (or anything for that matter).
Take that plus that fact nobody here is a labour lawyer or MBA and I think its pretty safe to say your armchair quaterback analysis isn't worth s$%t.
There is far more to ACA's pension problems than the media will ever know.
It's interesting that when the rubber hits the road, it becomes quite clear that Air Canada is really still part of the Federal Government.
How nice it must be, to operate with a safety net unwillingly provided by the taxpayers. There are sure a lot of other companies in Canada that wished they had that kind of unlimited financial backing.
Why should Air Canada be any different from any other corporation? Who died and make them king?
FamilyGuy wrote:
Take that plus that fact nobody here is a labour lawyer or MBA and I think its pretty safe to say your armchair quaterback analysis isn't worth s$%t.
There is far more to ACA's pension problems than the media will ever know.
Probably the fact that the pension is really worth about 10$ after they invested in NorTel @$150, Bre-X and Enron..
Just the things the media probably doesn't want us to know, eh FamilyGuy?
Why should Air Canada be any different from any other corporation? Who died and make them king?
Air Canada died, the Unions are self proclaimed kings.. N2 said it best.
“We will not sway in our demands, we will fight until the bitter end….. Full pay to last day!
In closing I would like to remind each of the brotherhood not to forget to pick up their food stamps on the way out.
I hope AC employees listen real close to their unions... right up to the bitter end. They'll all of a sudden realise that that same over the top pension and that increase in FA wages and the increase in holidays and increase in work conditions means absolutely nothing if there is no work place to go to.
Doesn't seem like a tough descision to make. Either take a pension cut or lose everything. If they do finally agree to the cut, their bitterness towards the company will only increase, service will get even worse, it'll be worse then a mad cow meat market. On the other hand, if instead they hang on to their union's promises they will all lose their jobs and their bitterness will turn towards the people that really deserve it... the union.
