Skip to comments.The jobs bank costs GM jobs
Posted on 04/02/2006 5:21:30 PM PDT by Dane
The jobs bank costs GM jobs
A company that loses $10 billion cannot afford 7,500 who don't work
Wednesday March 29, 2006
AS General Motors tries to reduce its payroll by 30,000 jobs, the New York Times has pointed out that GM still pays as many as 7,500 workers to do nothing. This is part of a Jobs Bank experiment gone mad.
In 1984, the United Auto Workers and management created the Jobs Bank as a way of keeping workers on the payroll while the company automated its production.
"The argument went that if the auto companies had a pool of idled workers, they would be less likely to outsource labor overseas," wrote Jeremy Peters of the New York Times.
What was supposed to be a billion-dollar program was supposed to end in 1990. A generation later, it continues. It costs GM about $9.4 million a week to pay the salaries of people in the Jobs Bank, and that does not include their health care and pension benefits.
Now the bank threatens to undermine the buyouts of up to $140,000 each that GM is offering its workers.
Peters visited Oklahoma City, where 2,300 employees remain on the payroll a month after GM shut down their plant. They receive full pay and benefits even though there is nothing for them to do except sit around and chat, play games, or watch TV.
Garland Pruitt, 53, with 27 years of seniority, told Peters: "Why would I walk out the door with $2,000 less per month and have to go find a job when I can sit in the bank, get my 30 years and retire? It's really to my advantage to ride the bank out as long as it goes."
Ridiculous is too mild a word to suit this situation. And it gets worse. The Bloomberg News Service reported that GM will try to modify the Jobs Bank agreement with the UAW next year.
Why wait that long? The company does employ 131,000 hourly workers. Their jobs should not be jeopardized by the unproductive end of the payroll. Jonathan Steinmetz, an analyst with Morgan Stanley, told Peters the Jobs Bank makes GM less competitive.
"This just isn't a cost that can be passed along," Steinmetz said. "Most consumers would rather buy a car with an iPod than a car with a surcharge for a Jobs Bank worker."
But why wait until next year before dealing with this problem? GM executives do no one any good by prolonging this program that fails in so many ways.
It is hard to feel sorry for a company, or the union that depends on it, when the company lost $10.6 billion last year and still pays 7,500 people to sit around and do nothing.
It gets boring real fast
That's my job! (retired)
Yeah, few Mexicans on that end of the payroll
I had heard about this before, but was sketchy on the details. Someone needs to take a blow torch to GM and its Unions. This is nuts for a company losing this much $$ to be tolerating this crap--it indicates a total lack of leadership on someone's part. The Union should be smart enough to recognize that they are the parasites killing the host. Maybe Receivership IS the only answer--a very sad commentary for a once great company and engine of American growth.
Yes, Americans are lazy.
That's a winning campaign slogan
Because right now negotiations are going on with UAW/Delphi/GM, and the jobs bank is only one of numerous issues on the table.
The UAW contract expires in 2007, and that will determine the timing of how things proceed.
See the USA in your Subaru....
I wonder if GM goes bankrupt, does that end the pensions of their retiriees?
That isn't exactly just. If that was true then unions would be growing in size rather then shrinking even as industry grows.
The problem is that a union is geared toward making sure the least productive keep their job.
The UAW has turned this into such a art form, to the point that other unions regard them with disgust.
GM needs to get into the sewer-cleaning business and put some of that "pool" to work. I wonder how many of them would quit?
At GM you can just not show up for work and you will not be fired or disciplined.
This is not a personal day, this is a No Call/No Show that would at least see you on probation at any other company. But GM UAW members can do this up to five times a year and no action is taken.
How do you run a line when you have no idea if your crew is going to show up?
Nope. If you want to know who'll be paying those pensions, just look in the mirror. Joe Taxpayer.
seven thousand happy democrats.
"See the USA in your Subaru...."
Only if you're gay!
You mean the govenment gaurantees those big UAW Pensions!
HOWEVER a bankruptcy judge will not look kindly on the jobs bank clause if the union objects to the inevitable GM effort to avoid that aspect of the contract.
Those who do not take the parachute may live to regret their selfishness.
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