src='/AM/Images/headlines/headline.gif' />
June 9, 2005
Boehner, Johnson Planning to Unveil Long-awaited Pension Measure
Today
Two House members today plan to introduce comprehensive pension
legislation that includes proposals that previously have drawn
significant criticism from the business community and from some
Democrats, CongressDaily reported. House Education and the
Workforce Chairman John Boehner (R–Ohio), who is introducing the
bill with Employer-Employee Relations Subcommittee Chairman Sam Johnson
(R–Texas), said the legislation would help avert a taxpayer
bailout of the Pension Benefit Guaranty Corp. (PBGC). The bill includes
a proposal similar to the White House’s plan to raise pension
premiums and establish a new rate that companies must use to calculate
their pension contributions. Under the bill, companies would have less
time to make up shortfalls in their pension funds. It would also require
companies to disclose more information to employees about the financial
status of their
pensions.
Several senators also are moving ahead with their own plans for a
pension overhaul. Senate Finance Chairman Charles Grassley
(R–Iowa) and Health, Education, Labor and Pensions Chairman
Michael Enzi (R–Wyo.) are separately working on bills. Enzi said
this week he wants to clear a bill through his committee by the time
Congress breaks for its August recess.
Separately, the Wall Street Journal reports that the
pension agency’s gap is expected to more than triple to $71
billion in the next decade. Read the full article at
href='http://www.wsj.com/'>www.wsj.com (subscription required).
Bankruptcy: An Option for GM?
The world’s largest automaker had $52.6 billion in cash and
marketable securities on its balance sheet at the end of the first
quarter, even as it was reporting a $1.1 billion net loss, CNN/Money
reported. While that cash balance is down about $1 billion from the
beginning of the quarter, it’s up about $3 billion from where it
was a year ago. Read the full article at
href='http://money.cnn.com/2005/06/08/news/fortune500/gm_healthy_hurting/?cnn…'>money.cnn.com/2005/06/08/news/fortune500/gm_healthy_hurting/?cnn=yes.
Brobeck Fight Turns to Venue Choice
Tower Snow Jr., the former chairman of now-defunct Brobeck, Phleger
& Harrison, asked U.S. Bankruptcy Judge Dennis Montali to allow a
jury to hear Ronald Greenspan’s (the firm’s bankruptcy
trustee) $2.7 million suit against him, the Recorder
reported. But on Friday, Greenspan’s lawyer filed a motion asking
the judge to deny Snow’s request. Read the full article at
href='http://www.law.com/jsp/article.jsp?id=1118221516447'>www.law.com/jsp/article.jsp?id=1118221516447.
Airline Inspections Called Inadequate
The Federal Aviation Administration (FAA) is failing to effectively
oversee new safety risks posed by sharp cost-cutting in the airline
industry and rapid growth of budget carriers, a government report
concludes, the Washington Post reported. U.S.
airlines—many of which continue to struggle financially—are
looking for new ways to cut costs by outsourcing maintenance and
reducing the time that planes are parked at gates. At the same time, new
low-fare carriers are expanding to dozens of cities. Both trends have
created safety concerns that the FAA has not adequately addressed in its
inspection program, according to a Transportation Department inspector
general report issued yesterday, the newspaper reported.
Air Canada in Pilot Talks on Big Boeing Jet Order
Air Canada is in the final stages of talks with its pilots on
contract terms for flying the 32 Boeing wide-body 777 and 787 Dreamliner
jets it ordered recently in a $6 billion deal, the airline said on
Wednesday, Reuters reported. If no agreement is reached by June 10, Air
Canada can cancel the orders without penalty, Robert Milton, chairman,
president and chief executive of ACE Aviation Holdings Inc., Air
Canada’s parent, told analysts, the newswire reported.
Western Forest Cuts Production, Delays Payment
Western Forest Products Inc. will temporarily idle some mills and
delay an interest payment to preserve cash amid lower-than-expected
sales, the Canadian lumber company said on Wednesday, Reuters reported.
The company said it will take advantage of a provision that allows it to
defer payment of 50 percent of the interest due on its 15 percent
secured bonds. Payment on the C$10.3 million in interest can be delayed
until July 28, 2009. Western Forest was created by creditors last year
out of the bankruptcy of Doman Industries.
Bankruptcy Not Planned, Can’t Be Ruled Out—Delta
Delta Air Lines CFO Michael Palumbo on Wednesday said filing for
bankruptcy was not part of the cash-strapped carrier’s
transformation plan, but it is a possibility he cannot entirely rule
out, Reuters reported. Speaking at the Merrill Lynch Transportation
Conference in New York, Palumbo said the Atlanta-based carrier would
like to complete its transformation plan outside bankruptcy court. The
plan targets more than $5 billion in annual savings by 2006, the
newswire reported.
Court Denies UAL Attendants’ Bid to Save Pension
A federal district judge on Wednesday denied a bid by flight
attendants at United Airlines to block the government from assuming
control of the group’s pension plan, Reuters reported. Last month,
a federal bankruptcy judge in Chicago approved an agreement between
United and the Pension Benefit Guaranty Corporation (PBGC) for the
agency to take over the airline’s four union pension plans that
are underfunded by nearly $10 billion.
The Association of Flight Attendants sought a preliminary injunction
to halt termination proceedings on grounds that United violated law
governing voluntary pension plan terminations. But District Judge Ellen
Segal Huvelle of the U.S. District Court for the District of Columbia
said the flight attendants failed to meet the legal test for an
injunction, the newswire reported.
Southwest CEO Keeping Options Open on US Air
Southwest Airlines Co. on Wednesday said it was considering bidding
for some assets of US Airways Group Inc., which is slated to be bought
by America West Holdings, Reuters reported. America West’s
proposed takeover of bankrupt US Airways, announced last month, would
create the sixth-largest domestic airline and a leading discount carrier
rivaling Southwest. “We’re going to keep all of our options
at this point,” Southwest Chief Executive Gary Kelly said, the
newswire reported.
HealthSouth to Settle SEC Charges; Scrushy Jury Pauses
HealthSouth agreed to pay $100 million to settle securities charges,
while the trial of the company’s former chief executive moved
forward slowly, the New York Times reported. Read the full
article at www.nytimes.com.