As of this week, the jobs bank, a system allowing laid-off UAW members to continue to receive compensation, is no more at GM. The decision came last Wednesday, only two days after the official closure of Chrysler's jobs bank.
In the midst of the recent catastrophe faced by American automotive companies, the UAW jobs bank system has come to represent what many perceive as the excesses of a union benefits system gone awry, according to a Dow Jones newswire to CNN. Thus, one condition under which the automakers accepted their bailout funds was the nixing of the program, which, at its inception, gave 100% compensation to laid-off autoworkers. This number was cut to 85% in December 2008, and GM and Chrysler are now advising their discharged employees to file for unemployment benefits, which would award them approximately 72% of their salary, coming both from the employers and from the state.
According to UAW president Ron Gettelfinger, the jobs bank at Chrysler is comprised of approximately 700 workers, GM's by 1400. The Associated Press has also reported that Ford Motor Co., which did not accept a bailout, has decided to eliminate its own branch of the UAW program as well, which currently compensates about 1400 workers, though an effective date of closure has not been agreed upon. This would help Ford to remain competitive during a rather dismal period in American automotive history.
Meanwhile, Michigan's unemployment system is struggling to keep pace with the needs of its growing client base. The system has already been overwhelmed due to understaffing of both its offices and its call system, though the Grand Rapids Press reports that 90 additional workers are expected to be hired this month, and an additional computer server is also in the works. However, should Detroit's automakers continue to shed jobs, the system may come to be overburdened yet again in the near future, and lines out the door may once again form at unemployment offices across Michigan.
The Detroit Free Press
The Grand Rapids Press