In a former life, I was entrusted with the responsibility of dealing with the public on behalf of my company, Southern Bell and later BellSouth. Getting the trust and confidence of my management was a long and arduous task. There were many stressful days, a lot of weekends in the office and bulging briefcases in between. I took my role in the company very seriously. BellSouth expected a lot from its employees and from its managers; it required near-perfection. Make a couple of bad decisions, and there was always someone waiting in the wings to take your job and your parking space.
Because I showed some ability to survive and occasionally prosper in the corporate pressure cooker, I moved up the management ladder until I retired as an officer of BellSouth Corporation. The company compensated me well for my efforts. I also received good benefits, a generous pension when I retired and the realization that at my rather ripe old age, I have the financial independence to do pretty much whatever I want.
Or do I?
After reading about Delta Air Lines’ bankruptcy, I will no longer take anything for granted — like my pension and my benefits. A lot of good people at the airline worked just as hard, or harder, than I did. They worked outside in all types of weather and all kinds of conditions. They schlepped tons of luggage. They left their families on weekends and holidays to serve their customers. No matter what their job, they gave Delta all they had — which was a lot. The employees even bought the airline an airplane! As loyal as BellSouth employees were, I never remember anyone suggesting we buy our company a cell phone tower and a switching center or two.
The reward for their hard work and dedication? Twenty-eight thousand retired Delta employees stand to lose many of the pension dollars they had counted on for their future and which they had rightfully earned. They worked in good faith, thinking that the company would likewise act in good faith.
It turns out that Delta’s pension plan is underfunded by some $10.6 billion and it is likely the company, now operating under Chapter 11 bankruptcy, will turn its pension obligations over to the Pension Benefit Guaranty Corp. (PBGC), which is itself $23 billion in the hole at the end of fiscal year 2004.
If the PGBC takes over Delta’s pension obligations, it is estimated that an employee 65 years of age or older would receive slightly less than $46,000, and someone who is 58 or younger would get no more than $26,000. Delta pilots and executives will likely receive an even sharper financial blow, because the company says it expects to stop supplemental pension payments to these groups. Employees’ insurance premiums could also be severely impacted by the company’s bankruptcy action. What should have been the salad days for Delta employees is now a time of total uncertainty.
Blame much of Delta’s problems on the current economic environment, skyrocketing fuel costs and a business model that may no longer work in today’s no-frills, low-cost, competitive airline business. But don’t forget former CEO and resident turkey Leo Mullin and his cronies, who managed to get their pensions placed into a bankruptcy-proof pension trust fund in 2002, and multimillion-dollar compensation packages that allowed all of them to bail out on their bad decisions and leave Delta employees to handle the crash landing. Their actions may have been legal, but they were immoral to the max. I hope they choke on their filthy dollars.
As for me, I am now a little uneasy about my own retirement. Fortunately, no Leo Mullin-type robber baron has shown up on BellSouth’s doorstep — yet. But as the company transitions from a regional telecommunications company into an international player in who-knows-what businesses, the day could come when BellSouth retirees will become a cost-causing number to be erased from the company balance sheet by a financially or morally bankrupt company management of the future. Like Delta’s retirees, I earned what I got. Like them, I now realize that a company’s word isn’t always its bond.
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