UNITED [UAL] WE STAND! WITH PRIVATE PENSIONS, WE PERISH! ©

The day breaks, and so too does the news; United Airlines is close to bankruptcy. In an attempt to survive, this private company turns to a federal government agency for assistance. United is asking Pension Benefit Guarantee Corporation to fund its retirement program. This once strong corporation is failing; their future looks grim. This seems to be the start of a trend for big businesses today. Others recently announced their struggles. Corporations that led the country are grappling for business. What we once relied upon, trusted to be true, is no longer. Investing in private industry is not the certain path that many profess it to be. The tide is turning and who among us can accurately predict the future?

History can only guide us. Let us look at the history of United Airlines. Possibly there are lessons to learn.

Years ago, in 1993, United Airlines board of directors approved an innovative proposal. The plan would merge the missions of management, pilots, machinists, and flight attendants. These corporate giants offered their [then] 54,000 employees partial ownership in the company. The thinking was that this would assuage the financial struggles that the business was facing. Many believed that employee-ownership would be an incentive for United Airlines workers. Service would improve; morale would be better. Workers would be happy and pleased to pleasure their customers. Clientele would return again and again. All would result in greater profits, more monies for shareholders and employees alike. United Airlines would be united in its vision.

Aesop, the most famous fabulist of all times stated the concept of a united force in his fables. In the 6th century he offered, “Union gives strength.” President Lincoln repeated this idea in the 1860’s; he posed “United we stand.” The strength of working together for the greater-good, is the premise of our Social Security program, a plan initiated during the Franklin Delanor Roosevelt presidency. Currently there are some 45 million persons receiving Social Security benefits. Before Social Security, people such as these, under similar circumstances, lived in poverty. Yes, unity was the answer.

As of July 12, 1994, portions of employee salaries and benefits would be paid in United Airlines stock. This groundbreaking action helped to create the largest majority employee-owned company in the world. Workers and management were united. United, they stood solid. Life looked good. However, it was not. Why not? What happened? Why was United not truly a united force?

In the 1985, the pilots were disheartened, they wanted a pay increase, more benefits, and their requests were refused. The pilots went on strike. Jobs were lost; pilots replaced. Even President Reagan stepped in to undermine the will of the airmen. During this turmoil, famed defense attorney, F. Lee Bailey was frequently invited to address the pilots union. He convinced them that if they were to own a stake in the corporation, if they became majority stockholders, they would earn a place on the Board of Directors. They would eventually have the power to make policy. He challenged them and so the seed was sown in the mind of the airmen. Ultimately in promoting this plan the pilots took the lead; they began working towards this end. They worked to recruit the support of the other unions, machinists, and flight attendants. However, most were reluctant.

Years went by and the industry changed. New airlines sprouted up and they survived. Airlines such as Southwest did well. They introduced reduced fares and services; people flocked to them. Frills and luxury were no longer marketable. It was clear to United Airlines; concessions must be made. Therefore, accoutrements were cut, prices too, and an already struggling airline was united in name only.

Management was replaced though this was not a change for the better. The pilots never fully recovered from their strike and strife, nor did the strength of their union. The low morale trickled down; a once prominent airline dove deeply downward into a spiral. Machinists were fired, 5000 in all. Collective bargaining no longer seemed possible. Workers were distressed; the choice was a cut in wages or the loss of jobs. Under great duress, the machinists and attendants agreed to the employee-ownership plan. United became an employee owned airlines; however, in truth, in practice, it never was.

Soon it was clear that the idea of employee-ownership was an empty promise. The visionaries that founded the concept were fired. Those critical of the plan were in charge. While the employees were united in the skies, their loyalties were never conjoined. The pilots, machinists, and flight attendants each saw themselves as part of their own exclusive group, intermingling was an illusion.

There was no strength, no union, and the employees were not truly united! Now, as financial woes weigh heavily and the company is failing, they turn to a government agency for solace and safety. The Pension Benefit Guaranty Corporation takes over United Airlines' pension funds. This private industry is feeling as though it was about to perish into an abyss. It desires to carry on. Tens, if not hundreds of thousands depend on them. Therefore, they turn to the security of a social system. United is not the first large company to do so. Remember Bethlehem Steele? Sadly, United will not be the last; there is ample reason to believe that other once high-flying companies could soon go belly-up.

The parallel does not escape me. In establishing and maintaining Social Security, we, as a nation work together; we are united. We are stronger in concert than we are alone. Our union empowers us and helps us to build and preserve our economy. Before Social Security, half of America lived in poverty. Now, Social Security provides safety, even sanity for what would have been a struggling population. Today, the elderly, children, surviving spouses, and the disabled benefit from our joint effort, daily!

Might the lesson of today’s news be that when we work separately, as the employees of United Airlines did, when we have private accounts, and are individuals in an ownership society, we are no longer united in our cause? We are not “one for all.” Can that mindset simultaneously exist with “all for one?” Will we stand united, each contributing to the greater-good of our society and our social security? Will we turn to private, personal, individual agendas and accounts? Ultimately, will we create poverty and will many possibly perish? Consider the plight of United Airlines and even the history of privatized pensions in Chile and think of what their history might teach us.

Eschaton offers another "Lovely" perspective on the United story. You may enjoy his thoughts.