Employees of American Airlines worked for years on the assumption that they would receive a pension. But that legal obligation may not survive America Airlines’ bankruptcy.

Companies and cities see this as a way out. They can drive a hard bargain with unions. Who do you think unions worry about most? Existing workers or retired workers?

The unions may fight. But how can they win? Once a firm declares bankruptcy, it can tell workers, “Accept our offer or else find a new career.”

The parent of American Airlines wants to eliminate about 13,000 jobs — 15 percent of its workforce — as the nation’s third-biggest airline remakes itself under bankruptcy protection.

The company proposes to end its traditional pension plans, a move strongly opposed by the airline’s unions and the U.S. pension-insurance agency, and to stop paying for retiree health benefits.

Read More at the Tea Party Economist By Gary North, Tea Party Economist

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