April 18, 2003

For all the talk about "bankruptcy reform", one area that never seems to get debated by Congress is the threatened use of bankruptcy by corporations as an extortion device against workers. Now that the unions have awakened to discover that for all the concessions they were forced to accept to keep American Airlines afloat, management was prepared to make out like bandits, it seems like the airline will go double-toothpicks after all by the beginning of next week.

I wonder why unions don't call the bluff of management more often in these situations. Obviously, most of the time they will get screwed by the bankruptcy court in terms of benefits and pensions, but every once in awhile, the potential damage to the worker is exceeded by the devastation to management when an aggressive judge or trustee examines the whys and wherefores of a company's collapse. Of course, it probably wouldn't make any difference over the long haul anyway; if enough CEO's get grilled by a bankruptcy judge over the salaries and benefits they made while their company nosedived, Congress will reform the bankruptcy code to make sure they don't have to answer those questions in the future.

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