GM To Cut Controversial "Jobs Bank"

(AP)  General Motors Corp. said Wednesday that its "jobs bank" program will end Monday, following a similar move at Chrysler LLC that helps satisfy the conditions the government imposed when it lent the automakers $17.4 billion late last year.

The program, which gives union workers at the Detroit Three most of their pay and benefits while they are laid off, was the target of much ire during the companies' requests for a federal bailout.

GM spokesman Tony Sapienza said Wednesday that the 1,600 GM workers in the jobs bank will be placed on layoff and will need to file for unemployment. They'll receive about 72 percent of their salaries, which will be paid for by state unemployment benefits and GM subsidies.

The length of time workers can receive the benefits varies from state to state but usually amounts to about 48 weeks, Sapienza said.

Christine Moroski, a spokeswoman for the United Auto Workers union, declined to comment.

Sapienza said the move will allow cash-strapped GM to use state unemployment benefits to help cover some of the costs of paying the workers.

"We really appreciate the union's willingness to work with us as we continue to restructure for long-term viability," Sapienza said.

Union officials said late last week that Chrysler was eliminating its jobs bank effective Jan. 26. Like at Detroit-based GM, Chrysler's affected workers will continue to receive supplemental pay to make up much of their wages after unemployment compensation.

Auburn Hills, Michigan-based Chrysler was also required to eliminate its jobs bank as a condition of its $4 billion in Treasury Department loans. GM was granted $13.4 billion and already has received $9.4 billion of those funds.

The terms of the loans call for GM and Chrysler to eliminate "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."

It has been unclear whether this provision also requires the companies to eliminate the supplemental pay they provide while workers collect unemployment benefits.

Both automakers must submit plans by Feb. 17 showing that they can become viable. If the Treasury isn't satisfied with the plans, the government could call in the loans at the end of March.

Ford Motor Co. didn't take any government money, but company officials and UAW president Ron Gettelfinger have said they expect the Dearborn, Michigan, automaker to get the same concessions as the other companies so it is not disadvantaged.

[jetranger7]

GM / Chrysler / Ford all of em need and should cut back on major advertising, such as in Glossy Magazine ads, and news paper ads, Radio ads and TV ads, they spend multi- millions on advertising needlessly, and truthfully, nobody really pays any attention to those screaming dull non sense ads, most everybody just switches stations, turns to another channel or if reading, just continues to flip past those ignorant ads anyway,, they could save millions by cutting out lots of advertising in magazines, like Cosmopoltan, popular mechanic, natl. geograhic, sports illustrated, good house keeping, playboy etc,, just way too much advertising !!!!!

[pleasethink]

You crybabies like Glenn Beck who call yourself ''''conservative'''' never question what globalization has done to force America to go on welfare.

Let''s see - what has globalization done - It has reduced the price of international calls from NY to London from around $100 for 3 minutes to virtually nothing since 1960. It has dramatically reduced the cost of travel. It has increased your access to goods/services that would otherwise not be provided. It has shed unproductive and low paying labor intensive jobs for capital intensive jobs.It has also allowed for an ability to satisfy the needs of the individual. How - do you buy records, CDs or download your music to your IPOD? Go to the supermarket lately? Get a coupon at the checkout based on your spending habits? How often does your family cook dinner as opposed to going out/McDonalds and everyone getting what he/she wants? Want to rent a movie or get it on pay per view?

The problem you have with globalization is that in shedding the fat from our budgets, globalization forces the individual to have a better understanding of their world. YOU need to manage your funds; YOU need to update your resume in case of a need to change jobs; YOU need to make sure the health care you are receiving is appropriate for your lifestyle. Bottom line - YOU need to manage your life, not ask someone else to do it for you.

Globalization does what it should do. The problem is you need to open a book and read what it should do and what it should not do.

[solarrays247-2009]

For almost a century, the GOP has been the lapdog of a wealthy minority, from whom it took its marching orders and contributions. Only during the so-called Conservative Revolution" of 1994, fronted by Newt Gingrich, did the party pretend to speak for the rank and file. Yet, to look at GOP legislation of the period, very little of it actually benefited the middle-class, upwardly mobile American worker.

During the Bush Reign of Error, for example, the American middle class actually lost ground-- debt increased dramatically, savings were spent, the cost of medical care ballooned, along with the cost of living, and the prospect of escaping this cycle simply vanished.

Indebted to its patrons in executive suites, the GOP refused to recognize the American middle class is a nation of entrepreneurs that it still calls "workers" or "the self-employed".

Clearly, the GOP took sides in the American worker''''s struggle for economic freedom-- unfortunately, the wrong side. As Wall Street demonstrates, the GOP favors concentration of wealth and unrestrained privilege, rather than a vigorous economy in which all Americans have a share.

Posted by alphaa10000 at 07:17 PM : Jan 28, 2009

Super great post, and accurate!

[solarrays247-2009]

I think part of the requirement of any company, bank, etc.. to receive any bail out money is that the entire management team be fired & replaced by a more competent group.

Posted by Questionnews at 06:23 PM : Jan 28, 2009

I like your idea! I think it was in 1984, when Carl Icahn commented that the reason for the financial and production problems facing the auto industry, and other industries at that time, was because upper management was comprised of "frat brothers", and that it was not "what you know, but who you know."
I don''t think much has changed for the most part!

[questionnews]

I think part of the requirement of any company, bank, etc.. to receive any bail out money is that the entire management team be fired & replaced by a more competent group.

[c_estlavie]

It''s easy to bailout the car companies. Just buy an American car. Most of the people wanting to throw tax money at the companies are probably driving foreign made cars. Buy American. That''s the message. Well, at least they don''t seem to have censors on this forum like they do at ABCnews.com Maybe people will consider how they can be part of the solution instead of throwing government money at the problem.

[whitemale08]

You''''re a burden to the tax payers when you receive bailout funds ("loans") with our tax money. Ask your union to support you financially instead of using our tax money.



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Posted by win4usa at 05:47 PM : Jan 28, 2009--

That''s not the unions fault, that''s Ronnie Raygun for going ''global'' and not protecting our manufacturing jobs wit high enough tarrifs.

You keep on bashing the unions and let''s see where that gets ya buddy.

[win4usa]

All of you union bashing crackers haven''''t got a clue of what beloning to a union is about. I have been a union member for 42 years. I have a decent pension, medical benefits and I am not a burden to the taxpayers. How many of you non-union morons can say that. Unions give workers dignity and respect in the work place, something the conservative don''''t understand.


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Posted by Labourboss at 05:42 PM : Jan 28, 2009

You''re a burden to the tax payers when you receive bailout funds ("loans") with our tax money. Ask your union to support you financially instead of using our tax money.

[win4usa]

I''m curious how many people related to the auto industry are having buyers remorse voting for obama. They finally saw the light and figured out he''s not their savior and not going to bail them out. People are boycotting companies that receive bailout funds/loans to show Washington we don''t want bailouts for anyone!

[labourboss]

All of you union bashing crackers haven''t got a clue of what beloning to a union is about. I have been a union member for 42 years. I have a decent pension, medical benefits and I am not a burden to the taxpayers. How many of you non-union morons can say that. Unions give workers dignity and respect in the work place, something the conservative don''t understand.