Financial News Story of the Day – American Airlines Files for Bankruptcy to Avoid $800 Million Union Payouts
The American Airlines bankruptcy we all expected finally occurred today. The troubled airline’s parent company, AMR Corp., cited high union payouts and fuel costs as the major reasons for going to bankruptcy court, where American could legally reorganize and void its prior contracts with labor unions. American airlines had been operating at a loss of close to $5 billion in just a little under 4 years (source: Money.CNN.com).
Excerpt: “On Tuesday, Horton told CNN that bankruptcy “never has been a goal or preference.” He said that American is paying $800 million a year more in labor costs than it would be if it had labor contracts comparable to its competitors.”
Personal Finance Tip of the Day – How to Be Santa and Still Save
The holidays are coming up so I thought I’d share this great post from DailyWorth.com. Rather than just giving into gift-giving pressure like most parents usually do, the article shows some creative ways you can give gifts without ruining your budget. For example, don’t go running off to buy the latest tech gadget your kids might want – money does not equal thoughtfulness or love (source: DailyWorth.com).
Excerpt: “You don’t have to turn into a Grinch, but I’ve stopped worrying that a dose of reality will kill the buzz of Christmas fantasy. My kids aren’t getting an iPod, but they are getting affordable items they’ve shown they truly want. That’s a Santa strategy I can get behind.”
Daily Finance Summary – American Companies Suck
Stocks stayed mostly flat to the positive side today on news that European central banks may be considering quantitative easing measures like the Federal Reserve. Bank of America’s stock is at the $5 mark while American Airlines filed for bankruptcy protection today. It’s not a good time to have “America” in your name.
Quick Question: Do you think unions are necessary anymore?