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So are bankruptcies from Eastman Kodak and American Airlines only the beginning our next guest says many more of the Tom.
Even as his recovery -- -- even gets better as creditors grow tired of just kicking this can down the road Peter Kaufman.
Is president according group and one of the nation's leading restructuring experts and Peter we should also mention that that you're working.
For the transit workers union in the American airline -- right now.
-- -- first of all the premise that somehow our economy gets better but bankruptcies go up how does that work.
Well in -- and for sort of way just like when the unemployment when economy's bad people stop looking for work unemployment rate goes down.
But when people feel the -- getting better -- people look for work and the unemployment rate goes up.
So -- kind of thing with the economy and bankruptcies things are -- feel like there limping along may be getting a little bit better as that happens creditors.
Become less inclined to just sort of kick the can down the road amend and extend and let.
Companies keep pushing out debt maturities and covenant defaults as sir taking a little bit firmer stand -- sort of see that now.
Even though companies may say hey listen we're in a better positioned to tell you know do better.
If you guys give us more time than the -- that the winners are much more concerned with the lenders and they are with the area and the forces of the government let's talk about this American Airlines -- is a huge case obviously a lot of people were sort of surprise American Airlines from the management's wanna -- said listen.
We tried we've been negotiating for debt -- at a decade but close to it I mean that's the last major airline file for bankruptcy.
And they're saying the primary reason was the inability of unions to make any real or Smart concessions.
That's really not the case the -- transfer workers union who we represented in this matter.
Has been a great partners for American Airlines they've given billions in concessions over the last eight years to try to avoid the state coming -- been a great partner.
And now American Airlines has trotted out.
A very old tired and imaginative -- book which is.
We're going to cut cost cut wages cut jobs cut pensions.
And this is a microcosm what's going -- America the middle class is playing by the rules when they're getting run over.
What would you do restructuring is and how would you typically ask companies to do what is this typical bankruptcy that to cut cost Citi can stay alive.
There's going to be an equitable sharing of the pain and I think I'm going to be extremely surprised if the pain isn't gonna be asked to be born almost solely or primarily.
By the workers and buy this union who has been a great partner.
And in addition you know their safety -- implications here because.
American said that -- -- now gonna outsource a lot of the jobs that there are cutting from the union.
And they haven't -- where but particularly if it's overseas were a lot of other airlines do it.
The security and maintenance is not.
Near let me just a different issue though that both an American saying we've lost eleven billion dollars since 2001.
Cause it's a hundred million dollars more to fly these points because of our unions.
And then did at the overall you know we we -- we've seen an idea here to defend all unions -- -- but.
We have seen that the -- unions it felt like at the hostess thing recently.
Unions got a big a lot of people saying they -- they just weren't immovable object.
Yellow roadway the airline industry the auto industry state local governments.
Do you think unions in general general have to somehow Peter step up and say we've got to give them more -- -- -- -- -- shared sacrifice well that's -- and I'm Roger to defend all unions lot of unions have had very.
You know sort of fat cat deals for you to get paid when they're not gonna work -- -- That is an American Airlines American Airlines is trying to right its ship on the backs of the little guy and -- wrong because this union.
The two -- workers union.
Has been more than pitching it against billions of dollars over the last eight years in concessions to try and help partner.
To right the ship and now management -- take -- hundreds of millions of dollars in bonuses before they filed with four billion in cash.
And thirteen billion or credit to -- planes is trying to to do it on their backs the -- story.
151000 people losing their jobs are probably a lot more this is definitely ugliness is something I think American general American Airlines and American general gonna have to grapple with this issue for a long time and to your point we're gonna get more bankruptcies analyst thank you very much Peter -- -- -- the dharma was -- part of the initiation restructurings can be very difficult like it.
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