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UAW Ends Jobs Bank at Chrysler

Workers in the Jobs Bank will be laid off Monday and have to go on state unemployment and supplemental pay, says a UAW official who asked not to named because the union has not made an official announcement.

January 23, 2009
The United Auto Workers has agreed to let Chrysler end its Jobs Bank on Monday, January 26, as it seeks to help the automaker meet the labor-saving terms of its federal bailout before a February 17 deadline, a UAW official said Friday, January 23.

Workers in the Jobs Bank will be laid off Monday and have to go on state unemployment and supplemental pay, said the UAW official, who asked not to named because the union has not made an official announcement.

Unemployment and supplemental pay is about two-thirds of an autoworker’s gross pay versus 100 percent for the Jobs Bank, the official said. Officially, a worker in the Jobs Bank is not laid off but is awaiting another assignment.

Chrysler UAW locals were notified of the decision in a letter Thursday from UAW Chrysler department vice president General Holiefield. A UAW spokesman could not be reached for comment.

General Motors spokesman Tony Sapienza said the carmaker is discussing the subject with the union but would not comment further.

The UAW agreed to suspend the Jobs Bank last month so Chrysler and GM could qualify for $17.4 billion in federal bailout loans.

The government term sheets for the loans prohibit Chrysler and GM from paying idled workers any supplemental pay beyond what they would receive from unemployment.

When CEOs of the Detroit 3 automakers testified before Congress on behalf of their request for federal loans late last year, lawmakers criticized the Jobs Bank program, which pays workers who are not working, as an example of featherbedding.

The local union official said the future of supplemental pay is subject to negotiation with the companies. UAW president Ron Gettelfinger said the union has been talking regularly with Detroit’s automakers about the loan provisions but has not engaged in official negotiations.

By the February deadline, GM and Chrysler must also negotiate concessions with the UAW on retiree health care. They also must get savings from other stakeholders, such as dealers, suppliers and bondholders.

Filed by David Barkholz of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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