The Book of Proverbs tells us that "the borrower is slave to the lender." But many have pointed out that if the debt is large enough, the lender may become a kind of slave to the borrower, because he will do anything to try and salvage some kind of return on the loan. A similar scenario is playing out in many US corporations, as huge pension obligations to workers give many viable, going concerns a negative net worth, which enables them to seek bankruptcy protection. This ploy puts unions and other employee groups on the defensive. The latest example of this is auto parts supplier Delphi, which recently filed for protection from creditors under Chapter 11 of the US Bankruptcy Code and is currently negotiating give-backs from the United Auto Workers. In some cases, the ethical niceties are beside the point - if there is simply no money to pay the obligations, the bankruptcy is quite genuine. But usually in bankruptcy cases the difficult question is who is first in line for limited resources, and this tactic may place workers at a greater disadvantage than alternate ways of dealing with a threat of future insolvency. I think that in many cases it is appropriate for pension benefits to be first in line for snipping (though certainly not for elimination). Here is why. Pension benefits have come to be a basic workplace entitlement for career employees, a term that accurately describes most auto workers. A basic pension plan should certainly be salvaged, but some union pension plans are remarkably generous. I certainly don't begrudge the auto workers their hard-won contracts, but it is worth asking why unions have bargained for, and obtained, generous pensions instead of just larger salaries. I think that one reason for this policy is precisely that this gives the workers a stake in the future health of the employer. The union's interests are thus more closely aligned with those of the firm. This is exactly the same justification for giving employees stock options, but these were rare for low-level staff at the time soon-retiring auto workers negotiated their contracts. The same rationale can help us understand why some company pension funds invest significant amounts in the employer's stock. From a diversification point of view this is highly unwise, since the workers already have a lot invested in the employer, namely their jobs. And, certainly, the concentration can be excessive, as was the case of Enron. But a limited policy of investing in the employer's stock can give the body of workers a greater stake in the long-term health of the firm. I wouldn't say this policy makes the unions "complicit" in the employer's bankruptcy, because that would be judgmental. Rather, I see evidence of an implicit understanding between unions and management that some negotiated benefits would be conditional on the future health of the company, and Delphi, like many other companies with generous pension plans, is not a healthy company right now. email@example.com The writer is research director at the Business Ethic Center of Jerusalem (www.besr.org), an independent institute in The Jerusalem College of Technology. He also is a rabbi.