Posted on 06/24/2002 11:36:48 AM PDT by RCW2001
DAVE CARPENTER, AP Business Writer
Monday, June 24, 2002
©2002 Associated Press
URL: http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2002/06/24/national1426EDT0652.DTL
(06-24) 11:26 PDT CHICAGO (AP) --
United asked the government for $1.8 billion in federal loan assistance Monday, making it the biggest airline yet to seek help under a program set up after Sept. 11 to prop up the ailing industry.
The nation's No. 2 airline has lost about $1 billion since the terrorist attacks. It is the third major airline to seek federal loan guarantees under the program, behind America West and US Airways.
United said it asked the Air Transportation Stabilization Board to guarantee $1.8 billion of a $2 billion private loan.
United chairman and chief executive Jack Creighton called United "the perfect candidate" for the program, since it was a target of the attacks.
Creighton had said United would apply if it got wage concessions from its employees. It has since ordered pay cuts for its 11,000 management and salaried employees, estimated at $430 million over three years, and reached a tentative pay-cut agreement with its 9,200 pilots worth $520 million over three years.
Federal approval of its application is not assured. Not only have United's mechanics and flight attendants not agreed to cuts, but the airline has come under fire within the industry for seeking government help when it was trouble even before Sept. 11.
Stock in United's parent, UAL Corp., fell 44 cents to $11.51 in afternoon trading on the New York Stock Exchange.
©2002 Associated Press
If the government props up the losses incurred by boycott, we, the flying public no longer have a hammer.
Intended?
Americans should not think twice about economic packages for struggling corporations. It's a drop in the bucket compared to social spending like Medicare or Medicaid. PS Of course, if corporations based in America were less-regulated and less-taxed then they would not have to set up shop in Bermuda to begin with.
Wouldn't bother me.
God, the sheep are killing me around here!! Always done it? I don't even argue anymore half the time. Just goes right over their heads anyway
So what! What makes them special? If you can't cut the mustard you should not be in business. Government is not the tool to decide the winners and losers in business. That is the function of the market place.
The former USSR tried to run all the business and you know what happened to them.
Oink oink oink!
Here comes the pork!
The costs of bailouts are higher than just the amount of the bailout. Every dollar that is give to bail out an inefficient corporation was taken from the pocket of someone else who would have spent it on something else. Every other industry loses a dollar for every dollar that United gains. Another invisible cost are the efficient competitors (like southwest) who otherwise would have moved in on the territory and served the economy in a more efficient way.
Oh, and I forgot: Every time a company gets bailed out, it sends a signal to other companies that there is no downside for screwing up. That costs us, too.
I lost my job a few years ago, nobody bailed me out. I went on with life without complaining. Why should I pay taxes to bail-out some union guy with plumber's crack who didn't pay a dime to bail me out when I lost my job?
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