Detroit Free Press, January 29, 2009, Thursday

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Detroit Free Press (Michigan)

January 29, 2009, Thursday

METRO FINAL Edition

HEADLINE: GM TO END JOBS BANK MONDAY; 1,600 WORKERS TO GO ON LAYOFF, GET ABOUT 72% OF PAY

BYLINE: TIM HIGGINS

BODY:

General Motors Corp. plans to end Monday its controversial jobs bank program, which paid UAW workers who were not working, the company said Wednesday.

Chrysler ended its jobs bank program earlier this week. The moves come as GM and Chrysler are racing to get concessions from labor and other stakeholders as required under the terms of the $17.4-billion federal loans granted to the two companies.

The 1,600 UAW workers in GM's jobs bank will be placed on layoff and must apply for unemployment benefits.

Between a mixture of unemployment and company pay, the workers will receive about 72% of their normal compensation, GM spokesman Tony Sapienza said. In GM's jobs bank, workers had been receiving about 85% of their regular compensation.

"We are ending the jobs bank," Sapienza said. "Effective Monday, anyone that's in the jobs bank goes immediately into layoff."

Chrysler's UAW workers who were forced out of its jobs bank are also receiving a similar mixture of company and unemployment benefits.

The federal loans to GM and Chrysler called for the "elimination of the payment of any compensation or benefits to U.S. employees of the company or any subsidiary who have been fired, laid off, furloughed, or idled, other than customary severance pay."

GM indicated that with the elimination of the jobs bank it believes the company is meeting that requirement. However, the automaker noted that talks are still under way.

"This allows us to put a portion of our unemployment costs to the states, as most companies traditionally do," Sapienza said. "The terms of the loan agreement say that our severance policy has to be in line with what is customary. We believe this is in line with customary severance and layoff policy. ... We are continuing to work with our union partners to discuss other elements of the bridge loan and the things we still need to do."

The automakers instituted jobs banks at a time when they were modernizing their factories and needed to win labor support for innovations that would mean a loss of jobs.

The auto companies provided nearly all of an autoworker's pay and benefits when he or she was put into a jobs bank. UAW members went into a jobs bank if they remained laid off beyond 48 weeks.

Jobs bank compensation is different from the money the company pays workers who are laid off - which is known as sub pay - to offset government unemployment benefits.

"There's a huge difference in terms of what the supplemental unemployment - the sub pay - was doing and the jobs bank. The jobs bank was when they completely eliminated your plant and they had almost no hope of ever being called back," said Arthur Wheaton, a labor expert from Cornell University.

"Sub pay was: You're on unemployment and it's going to have all of the same rules and requirements, you're only allowed so long, and there's a big component in there to say, 'OK, you've got to go back and get some retraining or you've got to get some education or do something to get back to work.'"

The UAW declined comment.

The union's president, Ron Gettelfinger, indicated in December that the jobs bank provision was on the table for negotiations as the automakers' stakeholders were being pressured for concessions. He said he would move to immediately suspend the jobs bank.

He has said that the jobs bank has been severely reduced to a "mere shadow of what it used to be."

Contact TIM HIGGINS at 313-222-8784 or thiggins@freepress.com

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