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GM will eliminate jobs bank

Published: Thu, January 29, 2009 @ 12:10 a.m.

By Don Shilling

Removing workers’ extra unemployment benefits still is being negotiated.

Workers being laid off from the Lordstown car plant are losing their long-term safety net.

General Motors said Wednesday that it has reached an agreement with the United Auto Workers to eliminate the jobs bank, which pays workers who have lost their jobs. The change is effective Monday.

Workers in the jobs bank used to receive 95 percent of their regular pay for reporting to the plant even though they had no duties. Last month, GM reduced the pay to 85 percent but did not require workers to report to the plant.

Eliminating the jobs bank is part of ongoing negotiations to help GM meet conditions of $13.4 billion in loans from the federal government, said Tony Sapienza, a company spokesman.

The removal of supplemental unemployment pay is still being negotiated, he said. Loan conditions call for the elimination of benefits for laid-off workers that go beyond normal severance pay.

Labor contracts provide that laid-off workers with at least one year’s seniority receive supplemental pay, in addition to state benefits, for 48 weeks. The combination amounts to 72 percent of a worker’s pay after taxes and fees.

The jobs bank kicks in after these benefits expire.

GM and Chrysler, which also accepted government loans, have until March 31 to meet loan conditions and convince federal officials that they have a plan to be viable, or federal officials can demand immediate repayment of the loans.

Chrysler reached a deal with the UAW last week to end the jobs bank.

UAW President Ron Gettelfinger said late last year that the union was suspending the jobs bank, pending further negotiations. He has drawn a harder line on eliminating supplemental pay. He has asked President Barack Obama to support retention of the pay.

The UAW and automakers created the jobs bank in the 1980s in response to Japanese automakers’ offering workers lifetime employment without layoffs.

GM is in the process of laying off 2,800 of its 4,200 hourly workers at its Lordstown complex, although not all of them have one year’s seniority. Sales have been slow for Lordstown’s two products, the Chevrolet Cobalt and Pontiac G5.

The complex is going from three shifts to one Feb. 9. The third shift is being eliminated when the plant reopens Monday. Production has been down all of January.

The first and second shifts will alternate on a weekly basis until March 30, and then the second shift will be eliminated.

In related news, a Flint, Mich., television station reported Tuesday that GM has canceled construction contracts for a new plant in Flint to build engines for the Chevrolet Cruze and Chevrolet Volt. The Cruze is to be launched from Lordstown in April 2010.

A GM official said, however, that the company was looking into other plans for the engines, including using an existing plant. GM said late last year it was suspending the engine plant project, adding that the Cruze could use engines from overseas if construction ran behind schedule.


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