By Michael Collins
Companies saddled with debt and pension obligations are increasingly using bankruptcy to walk away from their promises. Here’s what this means for airline and auto workers -- and taxpayers.
While Delta Air Lines appears headed for a corporate nosedive, its pilots have opted to pull the financial ripcord.
Faced with a management that has decided to use the threat of bankruptcy as a negotiating weapon, senior pilots have been filing for early retirement by the hundreds and then taking their pension in a lump-sum payout. Every retiring pilot takes a haircut: A senior pilot at Delta gets a one-time payment of about $300,000, only half of what he or she would receive in monthly pension checks over the lifetime of the pension. But the Delta pilots know that pilots at US Airways Group stand to receive only about 25 cents on each dollar of their promised retirement benefits as a result of that company's repeated bankruptcy filings.
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