Klein ruled on 10/1/14 that the city of Stockton, CA. which is in bankruptcy
could reduce its pension obligations which were a contractural obligation to
CALPERS, the state pension fund. He said Federal bankruptcy law superceded a
state law which guaranteed pension payments.
bankruptcy phrase/concept explains what the city did regarding its
Judge Christopher Klein ruled on 10/1/14 that the city of Stockton, CA. which is in bankruptcy could reduce its pension obligations which were a contractural obligation to CALPERS, the state pension fund.
Bankruptcy has long been used as a tool in the private sector for stripping workers of benefits, contracts and rights. In the 1980s, we went through a period of hostile takeovers, leveraged buyouts, mergers and liquidations of companies in the airline, steel, coal mining, trucking and other industries. Iconic airline companies like Eastern Airlines, Pan Am, TWA, United and others were restructured or wiped out from the 1980s to the last decade. By 2002, more than 30 steel companies were in bankruptcy, including Bethlehem Steel, Republic Technologies, Wheeling Pittsburgh and National Steel.
Delphi and Visteon were the biggest of hundreds of bankruptcies in the auto parts industry, and, of course, Chrysler and GM were restructured in 2009. In each of these cases, bankruptcy was used to claw back gains that workers had made through struggle in earlier periods.
Pensions were destroyed, wages were slashed, labor agreements were torn up and hundreds of thousands of jobs were lost. In other words, using the bankruptcy courts as a tool to attack workers and steal their hard-won gains is not in itself a new development.
May 26th, 2015
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