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S. 2737, the "Stop Looting American Pensions Act of 2019"
To provide protections for pensions in bankruptcy proceedings, and for other purposes.
S. 2938, the "Fair Warning Act of 2019"
To amend the Worker Adjustment and Retraining Notification Act to support workers who are subject to an employment loss, and for other purposes.
Behind a UAW Crisis: Lavish Meals and Luxury Villas
A federal investigation has led to accusations that union leaders diverted funds to perks like a $6,500 steak dinner and golf outings and gear costing $80,000, the New York Times reported. The scandal comes on top of an investigation into the company’s and union officials’ improper use of millions of dollars from a joint Fiat Chrysler-UAW training center. In direct financial terms, the scandals do not approach the scale of the corruption that plagued organized labor in the 1960s and ’70s. But the stakes are nonetheless enormous, given the UAW’s outsize influence over auto manufacturing, a pillar of the U.S. economy that generates hundreds of billions of dollars in annual revenue and employs hundreds of thousands of workers. The union’s 40-day strike against General Motors this year cost the automaker an estimated $3 billion in profit. Last month, GM contended in a lawsuit that Fiat Chrysler had bribed the UAW to help it undermine GM by manipulating labor costs.
Alabama Pensions’ Troubled Bet: Lobster Rolls and Star Wars
Alabama’s retired teachers and other pensioners could use a huge box-office haul for the latest installment of Star Wars, which hit big screens last week. Their pension fund is betting on it, the Wall Street Journal reported. The Retirement Systems of Alabama has sunk upward of $221 million into a 16-location, boutique theater-and-restaurant chain, recently wresting control of the company in bankruptcy court. Alabama pensioners are now the owners and operators of iPic Entertainment Inc., a loss-making chain that helped usher in the era of dine-in theaters, serving moviegoers lobster rolls, steak skewers and cocktails in buttery leather recliners. The Retirement Systems of Alabama, which manages more than $40 billion on behalf of about 360,000 public workers and retirees, has long invested beyond the realm of stocks and bonds. Under the leadership of David Bronner, who has served as CEO for nearly a half-century, the pension has pursued a range of so-called alternative investments including golf courses, a chain of small newspapers, hotels throughout Alabama and a Manhattan skyscraper. (Subscription required.)
Congress Passes Sweeping Overhaul of Retirement System
Congress passed the most significant changes to the nation’s retirement system in more than a decade, a move designed to help Americans save more, the Wall Street Journal reported. With the U.S. population aging and employers shifting responsibility for retirement saving to individuals, lawmakers have grown concerned that a significant portion of Americans are at risk of outliving their money. Americans between the ages of 35 and 64 face a retirement savings shortfall of $3.83 trillion, with 41 percent of households projected to run short of money in later life, according to the nonprofit Employee Benefit Research Institute. One prominent provision of the legislation passed yesterday, which President Trump is expected to sign, encourages 401(k) plans to replicate a feature of old-fashioned pensions by offering products with guaranteed income payments. The legislation also seeks to expand retirement plan coverage by making it easier for small companies to join together to offer 401(k) plans and share administrative costs. An estimated 30 percent of private-sector employees work for employers that don’t currently offer a way to save for the future.
U.S. Steel to Eliminate 1,545 Michigan Jobs
U.S. Steel Corp. warned of a fourth-quarter loss, announced that it would shut down most of its Great Lakes Works near Detroit, lay off more than 1,500 workers and slash its dividend, Bloomberg News reported. The company will indefinitely idle a “significant portion” of the Michigan operation, starting with the iron and steel-making facilities in April and then the hot-strip mill rolling facility before the end of 2020, according to a statement. Some 1,545 workers will get so-called adjustment notices. There is expected to be an adjusted loss of about $1.15 per share for the three months to Dec. 31, and a full-year, fully-diluted loss of 42 cents. The dividend will be reduced to 1 cent from 5 cents, and capital expenditure will be pruned, with both moves helping to preserve cash. The announcement from the Pittsburgh-based company highlights the challenges facing U.S. steelmakers, even though mills have enjoyed protection from the import tariffs erected by President Donald Trump. It also comes amid a flurry of M&A activity that’s reshaping the staple industry in the top economy. “Current market conditions and the long-term outlook for Great Lakes Works made it imperative that we act now,” U. S. Steel Chief Executive Officer David B. Burritt said in a statement. Production currently at Great Lakes Works will be shifted to Gary Works in Indiana.
Supreme Court Grants ‘Cert’ to Decide Whether Inaction Violates the Automatic Stay
Virginia case highlights the damage that will be done to debtor protections if affirmative action is required for a stay violation.
A Coal Baron Funded Climate Denial as His Company Spiraled Into Bankruptcy
As his coal mining company hurtled into bankruptcy, Robert E. Murray, the former chief executive, paid himself $14 million, handed his successor a $4 million bonus and earmarked nearly $1 million for casting doubt on man-made climate change, new court filings show, the New York Times reported. The company, Murray Energy, filed for bankruptcy protection in October, reporting $2.7 billion in debts and more than $8 billion in obligations, in large part to pension and health care plans for workers. But those debts appear to have done little to scale back the spending habits of Murray, a prominent supporter of President Trump who helped engineer dozens of climate change and environmental rollbacks over the past three years. The 79-year-old coal executive has been a vocal denier of the established science that human activities like the burning of coal are causing climate change and once warned that his dying industry must receive subsidies from the federal government “to make sure grandma doesn’t die on the operating table.” According to filings made public this week, Murray paid himself $14 million for one year’s wages as chairman of Murray Energy while his then-president, Robert D. Moore, who has since become chairman, earned $9 million annually in addition to his retention bonus.
