BREAKING DOOM: Extinction Event - Twinkies No More! Hostess Going Bankrupt.
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11/13/2012 06:10 PM
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Going bankrupt because they are using UNION members. Get rid of the Union and you'll have a profitable company again, much more profitable.Quoting: Anonymous Coward 24473407
Uhhh no, it's to offload or amend their pension plans.
Like American Airlines:
[link to www.dallasnews.com]
[link to articles.chicagotribune.com]
Delphi Corp would be another one. Or heck, Stockton, CA.
The reason why pensions are being targeted is that they can dramatically affect a corporation's liquidity or their debt to equity ratios. The largest liability for a corporation is almost always its pension plans (should it have one). This gets included into any debt related ratios and can make a corp look worse than it is. The amount of debt a corp holds can directly affect how much they can borrow based on liquidity and degree of risk. Corps with pensions look painful when compared to a corp whose retirement plan is an employee contributed 401k.
Last Edited by Porcelain Monkeywrench on 11/13/2012 06:10 PM