The controversial jobs bank program at General Motors Corp. will be suspended indefinitely Feb. 2, moving 1,600 United Auto Workers-represented GM employees out of a system that had GM paying 85 percent of their wages for not doing their jobs.
The workers will be put into laid-off status, where they can apply for state unemployment benefits and receive GM supplement pay. The combined checks will equal 72 percent of their compensation, said GM spokesman Tony Sapienza.
Ending the jobs bank is one of the provisions of the federal loans received by GM and Chrysler LLC. Last week, Chrysler and the UAW set Jan. 26 as the date to suspend that automaker’s jobs bank.
The jobs bank was created more than 20 years ago in exchange for the UAW’s help in making auto plants more flexible and automated. The union, bruised by the loss of half a million jobs during the recession of the late 1970s and early 1980s, wanted to preserve the jobs that were left.
The theory was that if GM and other automakers had to pay laid-off workers, they would always make sure they had work.
But Detroit’s automakers have lost huge chunks of market share and, just as importantly, have become more efficient, no longer needing as many workers.
The situation reached a boiling point as plant closings and production cuts funneled more than 12,000 workers into jobs banks at GM, Chrysler and Ford.
Stories proliferated about jobs bankers sitting in rooms for eight hours a day, filling out crossword puzzles, watching World War II movies and even taking naps. What received less attention was that many in the jobs bank did volunteer work in their communities and received other training.
The UAW agreed to significant changes in the jobs bank program during the 2007 national labor contract, which was approved by UAW rank-and-file members.
Waves of buyouts across the industry have reduced the number of workers in jobs banks to less than 4,000.
Ford Motor Co. has not yet made an announcement about its job banks program.