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9/22/2017 12:11:25 AM
Posted: 2/11/2006 1:16:54 PM EDT
Jobs bank programs -- 12,000 paid not to work

Big 3 and suppliers pay billions to keep downsized UAW members on payroll in decades-long deal.

By Bryce G. Hoffman / The Detroit News

WAYNE -- Ken Pool is making good money. On weekdays, he shows up at 7 a.m. at Ford Motor Co.'s Michigan Truck Plant in Wayne, signs in, and then starts working -- on a crossword puzzle. Pool hates the monotony, but the pay is good: more than $31 an hour, plus benefits.

"We just go in and play crossword puzzles, watch videos that someone brings in or read the newspaper," he says. "Otherwise, I've just sat."

Pool is one of more than 12,000 American autoworkers who, instead of installing windshields or bending sheet metal, spend their days counting the hours in a jobs bank set up by Detroit automakers and Delphi Corp. as part of an extraordinary job security agreement with the United Auto Workers union.

The jobs bank programs were the price the industry paid in the 1980s to win UAW support for controversial efforts to boost productivity through increased automation and more flexible manufacturing.

As part of its restructuring under bankruptcy, Delphi is actively pressing the union to give up the program.

With Wall Street wondering how automakers can afford to pay thousands of workers to do nothing as their market share withers, the union is likely to hear a similar message from the Big Three when their contracts with the UAW expire in 2007 -- if not sooner.

"It's an albatross around their necks," said Steven Szakaly, an economist with the Center for Automotive Research in Ann Arbor. "It's a huge number of workers doing nothing. That has a very large effect on their future earnings outlook."

General Motors Corp. has roughly 5,000 workers in its jobs bank. Delphi has about 4,000 in its version of the same program. Some 2,100 workers are in DaimlerChrysler AG's Chrysler Group's job security program. Ford had 1,275 in its jobs bank as of Sept. 25. The pending closure of Ford's assembly plant in Loraine, Ohio, could add significantly to that total. Those numbers could swell in coming years as GM and Ford prepare to close more plants.

Detroit automakers declined to discuss the programs in detail or say exactly how much they are spending, but the four-year labor contracts they signed with the UAW in 2003 established contribution caps that give a good idea of the size of the expense.

According to those documents, GM agreed to contribute up to $2.1 billion over four years. DaimlerChrysler set aside $451 million for its program, along with another $50 million for salaried employees covered under the contract. Ford, which also maintained responsibility for Visteon Corp.'s UAW employees, agreed to contribute $944 million.

Delphi pledged to contribute $630 million. In August, however, Delphi Chairman and Chief Executive Officer Robert S. "Steve" Miller said the company spent more than $100 million on its jobs bank program in the second quarter alone.

"Can we keep losing $400 million a year paying for workers in the jobs bank and $400 million a year on operations? No, we cannot deal with that indefinitely," Miller said in a recent interview with The Detroit News. "We can't wait until 2007."

Guaranteed employment

The jobs bank was established during 1984 labor contract talks between the UAW and the Big Three. The union, still reeling from the loss of 500,000 jobs during the recession of the late 1970s and early 1980s, was determined to protect those who were left. Detroit automakers were eager to win union support to boost productivity through increased automation and more production flexibility.

The result was a plan to guarantee pay and benefits for union members whose jobs fell victim to technological progress or plant restructurings. In most cases, workers end up in the jobs bank only after they have exhausted their government unemployment benefits, which are also supplemented by the companies through a related program. In some cases, workers go directly into the program and the benefits can last until they are eligible to retire or return to the factory floor.

By making it so expensive to keep paying idled workers, the UAW thought Detroit automakers would avoid layoffs. By discouraging layoffs, the union thought it could prevent outsourcing.

That strategy has worked but at the expense of the domestic auto industry's long-term viability.

American automakers have produced cars and trucks even when there is little market demand for them, forcing manufacturers to offer big rebates and discounts.

"Sometimes they just push product on us," said Bill Holden Jr., general manager of Holden Dodge Inc. in Dover, Del., who said this does not go over well with the dealers. "But they've got these contracts with the union."

In Detroit's battle against Asian and European competitors that are unencumbered by such labor costs, the job banks have become a major competitive disadvantage.

Breaking the banks

Analysts say the jobs bank could be a bigger issue than health care in the 2007 contract negotiations, particularly at Ford. It has a younger work force than GM, meaning any workers Ford sends to the bench are likely to stay there for a while.

"Ford is under pressure from investors to cut costs," said Roland Zullo, a research scientist at the University of Michigan's Institute of Labor and Industrial Relations. "At the same time, the unions are going to be under pressure to protect jobs."

Given that, he expects a compromise that allows for the jobs bank to continue but not on the scale of the current programs. "There's going to be a lot of give and take," he said.

But does the jobs bank make any sense in a climate of shrinking profits and declining market share?

"Labor wants the (jobs bank) because they want protection for their members," Zullo said. But he added that the jobs bank was also designed to help the companies by ensuring that skilled workers did not take their talents elsewhere.

"Companies invest in training," he said. "It protects that investment."

The investment only makes sense when viewed from a long-term perspective, a vantage point Wall Street is not known to favor.

"If they're going after the job banks, that would signal to me that the folks at the top have lost faith in their ability to recoup market share," Zullo said. "That would suggest to me that they really don't see a turnaround."

Analysts and labor experts believe some sort of compromise is inevitable as pressure builds on Detroit automakers to lower operating costs.

"The union probably realizes the money to pay for these programs probably doesn't exist," Szakaly said. "There's going to have to be some give on the jobs bank."

While the job banks may exemplify the sort of excesses that give unions a bad name, experts say it is wrong to cast all the blame in the direction of Solidarity House. He said the leaders of GM, Ford and Chrysler also bear some responsibility for the current problems.

"If these guys built cars people wanted, this wouldn't even be an issue," Szakaly said.

'Put out to pasture'

That view was echoed by Dan Cisco, another member of the jobs bank at Michigan Truck, as he drained a cup of coffee with Pool and other idled workers at Rex's restaurant in Wayne last week.

Ten members of UAW Local 900 are currently assigned to the jobs bank at Michigan Truck. They are all gun-welder repairmen -- or "gunnies." It is a classification each says they earned through decades of hard work.

And none of them is ready to give it up.

While some might envy their life of leisure, workers like Cisco, 56, feel humiliated by the program.

"I felt like I was useless -- like I was put out to pasture," he said. "It's just like how they treated the veterans. During the war, we were heroes. When we came back ... "

Cisco adjusts his cap, emblazoned with the familiar silhouette of a captive American POW, and sighs.

Michigan Truck, which builds the Ford Expedition and Lincoln Navigator full-size SUVs, used to be one of Ford's most profitable plants. Today, the nation is turning away from the big trucks and sport utility vehicles it builds.

Cisco, Pool and eight other gunnies from Michigan Truck have been in the jobs bank program since their positions were eliminated in July. They all have more than 36 years with Ford and are among the highest-paid workers in the plant. They say the company is asking them to accept one of the $35,000 retirement packages it is offering to trim its blue-collar headcount.

Most say they have no interest in retiring -- or spending the rest of their careers doing crossword puzzles.

"We want training," Dale Hall said.

Classes are available, the workers said. They have been invited to take courses on bicycle repair, home wiring and poker. Silk-flower arranging is also available.

"They might as well just give us a basket-weaving class, set us in the corner and let us feed the pigeons," Cisco said.

Community service

Not everyone in the jobs bank is spending their time marking it.

Dan Costilla, a member of UAW Local 602 in Lansing, was a body shop worker at GM's Lansing car assembly plant until it was closed in May. Now, instead of grinding joints, he rides herd over 16 of his former plantmates, making sure they keep their appointments at the local thrift store or Head Start program.

"I'm making sure that everything's going smooth," he said.

In the five months since Costilla and his co-workers have been unemployed, they have been busy mowing lawns for the handicapped, patching roofs for senior citizens and chaperoning youngsters on field trips to the zoo. It is all part of a community service effort organized by the union, with the support of the company.

"They realized you could only sit so long at the job bank office," Costilla said. "Your bones, they get sore after a while sitting down."

Bob Bowen, former president of UAW Local 849 in Ypsilanti, said the original intent of the jobs bank program was that idled workers would be gainfully employed on community projects or learning new skills -- real ones that they could actually use on the assembly line.

"The idea was not to have people loafing," Bowen said. "But that was a concern."

The problem, he said, lies in the way the jobs bank is administered.

Instead of setting up a central authority to manage them, responsibility was largely left to union locals across the country. Some organized community projects and job training. Others passed out decks of cards and hooked up VCRs.

Ken Pool said he can only take so many more World War II documentaries and crossword puzzles.

He and the other members of Michigan Truck's jobs bank planned to meet with a lawyer. They have already filed numerous grievances, accusing the company of age discrimination, but have heard nothing from the union or the company.

Now they are going to see if the courts can help.

As for Costilla and his colleagues, they are getting ready to go back to work at GM's new Delta Township plant. Costilla acknowledges that many of the union members are not looking forward to going back to work at the factory.

"The majority of us would rather stay here doing what we're doing," he said.

"You're not on the line, chasing a car."

You can reach Bryce Hoffman at (313) 222-2443 or bhoffman@detnews.com.
Link Posted: 2/11/2006 1:18:44 PM EDT
in before the union apologists.
Link Posted: 2/11/2006 1:19:37 PM EDT
but the unions are good!
Link Posted: 2/11/2006 1:23:54 PM EDT
now I know why those new trucks are $40,000....glad mine are paid off and I no longer support this foolishness.
Link Posted: 2/11/2006 1:24:27 PM EDT
Ive said it before and ill say it again. F--- unions!!!!!!!

There the reason this country is turning to shit. Some ass can sit on his butt makeing 31.00 an hour while thousands of others work there asses off for less than 10.00 an hour and barely make it. Same reason I do not support sports...My money will not go to a guy who PLAYS for a liveing and then bitches when his 3million dollar salary isnt enough.
Link Posted: 2/11/2006 1:46:47 PM EDT
Not only real, they are sucking the life blood out of the companies.

Several my patients when they are pregnant are put into the banks.

They literally sit around doing nothing in a large room.

They literally bring lawn chairs and blankets so they can sleep and hang out.

They bring DVD players and watch movies, etc.
Link Posted: 2/12/2006 8:43:19 AM EDT
Link Posted: 2/12/2006 8:45:58 AM EDT
Link Posted: 2/12/2006 8:53:26 AM EDT
Absofuckinlutely it is real, and unbelievable!

We used to do a ton of environmental work at the Ford, Edison, NJ Assemby plant. When they shut down the workers we knew told us that their "job" for the next two years was to report to a gym or something nearby, sign in, and spend the day reading magazines, shooting the shit, crosswords, whatever for 8 hours a day.

For which they would continue to receive their regular paycheck.

And they wonder why US automakers are going down the tubes.

Ah, yes, the wonderful modern union...whats in it for me, the entitlement bunch....no wonder so many union workers are dems....
Link Posted: 2/12/2006 8:55:15 AM EDT
[Last Edit: 2/12/2006 9:09:35 AM EDT by raven]
Putting union types on the dole is cheaper for consumers/taxpayers than trade restrictions
Link Posted: 2/12/2006 8:56:35 AM EDT
Link Posted: 2/12/2006 8:57:30 AM EDT
Yep, Walmart is killing this country! And it's all Bush's fault!

Toyota raised prices so that GM/Ford could compete

Fuck Unions. $31.00/hr x40hrs. x5000 employees watching TV. Yay! Buy American!
Link Posted: 2/12/2006 8:58:16 AM EDT
[Last Edit: 2/12/2006 8:59:15 AM EDT by OFFascist]
Wow, any company that agrees to setting up that kind of bullshit deserves to go bankrupt.

I dont like unions, but I dont really blame them they are obviously going to look out after themselves. Fuck if someone paid me $31 bucks an hour to sit on my ass I would too.
Link Posted: 2/12/2006 9:02:05 AM EDT
Buy American, support laziness and stupidity.
Link Posted: 2/12/2006 9:05:14 AM EDT
There's enough blame to go around everywhere.

The trick here is not being a part of the problem anymore, but finding a solution to the problem.
Link Posted: 2/12/2006 9:05:17 AM EDT
[Last Edit: 2/12/2006 9:07:24 AM EDT by 9245]
You think thats bad?, in Europe this is REQUIRED OF ALL COMPANYS, and even with the no show jobs (there not even required to go in, and do crosswords, they just go in once a week to pick up there checks, then go home....) they still have unemployment at 10+%, and remember the Libs want us to be just like Europe....
Link Posted: 2/12/2006 9:06:01 AM EDT
I'll be the odd one out here. How about blaming the employer to agreeing to such foolishness?
Link Posted: 2/12/2006 9:09:42 AM EDT

Originally Posted By OFFascist:
Wow, any company that agrees to setting up that kind of bullshit deserves to go bankrupt.



Thats exactly how I feel too. And tell me, am I supposed to trust replacement parts coming from Delphi? Should I really believe I'll have a factory warranty to fall back on? Hell, for that matter, what would make me think whats coming off GM assembly lines is safe OR reliable? Obviously theres alot of disgruntled people in this industry, something tells me they are'nt doing their best work


I dont like unions, but I dont really blame them they are obviously going to look out after themselves. Fuck if someone paid me $31 bucks an hour to sit on my ass I would too.

You don't see any moral problems there?
Even if that results in your kids having to choose between either a house or a car?

If it was straight up tax dollars paying 5000 people $31/hr to do absolutely nothing, I bet you'd feel different!

Oh well, I'm not payng for it in any case. I won't buy these products. Not now, and probably never.
Link Posted: 2/12/2006 9:10:03 AM EDT
G.enerous M.otors is what:

1. funded both my sisters college educations
2. bought every single baseball glove and item of clothing / feed a family of 5.
3. allowed my mom to stay home and be a mom.
4. provided my dad a great place to work.

My father retired from GM a few years ago ( skilled trades - millwright 30+ years ). he lives a great retired life and I could not be happier for him.

Hate US auto companies and their policies if you must .... I however put GM on sacred ground for what they provided to me and my family.

My dad busted his ass for years at the Delco Moraine brake plant in Dayton OH & is justly deserving of every dime & benefit he gets from his devotion and time he gave that company.
Link Posted: 2/12/2006 9:11:35 AM EDT
Yup. Remember hearing it on the radio. And they wonder why they aren't competative in the world market. I'm sure there are many reasons for that but this can't be helping.
Link Posted: 2/12/2006 9:19:13 AM EDT

Originally Posted By StrkAliteN:
G.enerous M.otors is what:

1. funded both my sisters college educations
2. bought every single baseball glove and item of clothing / feed a family of 5.
3. allowed my mom to stay home and be a mom.
4. provided my dad a great place to work.

My father retired from GM a few years ago ( skilled trades - millwright 30+ years ). he lives a great retired life and I could not be happier for him.

Hate US auto companies and their policies if you must .... I however put GM on sacred ground for what they provided to me and my family.

My dad busted his ass for years at the Delco Moraine brake plant in Dayton OH & is justly deserving of every dime & benefit he gets from his devotion and time he gave that company.



Good for you, but the situation that benefited you and yours so greatly is not sustainable. Dont count on the government and its powers to shield the auto compaines from competition to save the people after you.
Link Posted: 2/12/2006 9:20:45 AM EDT

Originally Posted By APBullet:
I'll be the odd one out here. How about blaming the employer to agreeing to such foolishness?



The unions have the companies by the balls. If almost all of a company's employees walk off the job, then production STOPS. Which would hurt more?

Yeah, this job bank shit is fucking nonsense, and if it bankrupts a few auto makers, and puts the unions out on their ass... THEY DID IT TO THEMSELVES.

Link Posted: 2/12/2006 9:35:37 AM EDT
[Last Edit: 2/12/2006 9:35:56 AM EDT by OFFascist]

Originally Posted By Matthew_Q:

Originally Posted By APBullet:
I'll be the odd one out here. How about blaming the employer to agreeing to such foolishness?



The unions have the companies by the balls. If almost all of a company's employees walk off the job, then production STOPS. Which would hurt more?



Well they are going to go bankrupt later if they dont do anything now. Sure it will hurt, but fuck its not like all those cars they are cranking out are selling all that well anyways.

Fuck I'm sure they could hire some more Mexicans, they are good at doing the jobs that Americans are unwilling to do.
Link Posted: 2/12/2006 9:49:28 AM EDT
[Last Edit: 2/12/2006 9:50:47 AM EDT by PeteCO]
$31 hour x 1.38 for benefits (an estimate - it's probably more)
times 2080 hours a year
times 12,000 employees
equals

ONE BILLION, SIXTY-SEVEN MILLION DOLLARS (and change) a year !!!!!!!!!!!!!!!!!!!!


Link Posted: 2/12/2006 10:06:42 AM EDT
Just curious:

If Toyota and Honda experienced a downturn in sales, what would they do with their idled workforce? Would they just lay them off with no pay or benefits?
Link Posted: 2/12/2006 10:07:32 AM EDT
Yes...it's all the union's fault. The automakers didn't agree to the program. The Unions actually kidnapped Ford's children and held them in a closet until the Ford Motor Company agreed to the terms. The automakers never had the opportunity to tell the unions to take a hike when the deal was brokered. And even though the car companies made a contractual agreement they shouldn't be expected to fulfill it if things get rough.
Link Posted: 2/12/2006 10:10:38 AM EDT

Originally Posted By SWS:
Just curious:

If Toyota and Honda experienced a downturn in sales, what would they do with their idled workforce? Would they just lay them off with no pay or benefits?



Depends on whether the plants are union or not. A lot of foriegn auto makers set up their plants in the southern US for one big reason, cheap labor, and less union power.

The jobs bank has been going on for years. Strengely enough I happened to turn on NPR (just channel surfing on my radio) and they had a very pro-jobs bank story on about how some of the jobs bank employees were doing side work like fixing instruments at a public theater.

Link Posted: 2/12/2006 10:11:37 AM EDT

Originally Posted By motown_steve:
Yes...it's all the union's fault. The automakers didn't agree to the program. The Unions actually kidnapped Ford's children and held them in a closet until the Ford Motor Company agreed to the terms. The automakers never had the opportunity to tell the unions to take a hike when the deal was brokered. And even though the car companies made a contractual agreement they shouldn't be expected to fulfill it if things get rough.



Wow, I can't believe it took almost 24 hours...
Link Posted: 2/12/2006 10:17:07 AM EDT

Originally Posted By motown_steve:
Yes...it's all the union's fault. The automakers didn't agree to the program. The Unions actually kidnapped Ford's children and held them in a closet until the Ford Motor Company agreed to the terms. The automakers never had the opportunity to tell the unions to take a hike when the deal was brokered. And even though the car companies made a contractual agreement they shouldn't be expected to fulfill it if things get rough.



In a manner of speaking the unions just did do that. They promised to shut down GM and FORD. WTF are they thinking? WTF are they going to do if they go broke? What GM and FORD did was blink because they were making crazy profits on SUVs. Now its time to pay the piper.
Link Posted: 2/12/2006 10:21:11 AM EDT

Originally Posted By pzjgr:
Absofuckinlutely it is real, and unbelievable!
And they wonder why US automakers are going down the tubes.
Ah, yes, the wonderful modern union...whats in it for me, the entitlement bunch....no wonder so many union workers are dems....

+1 Million!
Link Posted: 2/12/2006 10:26:36 AM EDT
[Last Edit: 2/12/2006 10:28:47 AM EDT by Da_Bunny]
That's like over $250,000-$350,000 an hour for those 12,000 guys.

I don't give a shit who's fault it is, I'm not paying either party for the ass-fucking.
Link Posted: 2/12/2006 10:46:06 AM EDT
This doesn't surprise me,after all it's the UAW.
Link Posted: 2/12/2006 11:33:34 AM EDT
Agreeing to such bought the companies some time, and now it's hitting the fan.

This is essentially a fixed cost (until the money runs out, that is), so why can't they put these people to work producing vehicles & parts, which would probably mean selling them at a loss, but less of a loss than throwing the money down an unproductive hole. The only way I can think of that this wouldn't make sense is if the variable non-labor costs (energy, materials, etc.) of running the plants are more than they could get for the vehicles. Would you buy a $20,000 Expedition?

Essentially, they would be getting "free" labor, in the sense that under this program the labor cost is already an obligation they can't avoid.
Link Posted: 2/12/2006 11:37:59 AM EDT
*(#&$(*@# THIRTY ONE DOLLARS AN HOUR?!?!? To sit on their asses?!? I'd be LUCKY to make $30 an hour at my job as an engineer Salary and 40 hours a week = $30/ hour, but we had to put in all sorts of overtime without pay, so much that my hourly pay was roughly HALF that.
Link Posted: 2/12/2006 11:56:17 AM EDT
Nothing new. I had a friend that worked for Union Pacific out west and had the same kind of deal. He was a brake man (whatever the hell that job entails) and worked only 1-2 days a week and got paid for a 5 day work week. They actually had a rotation schedule where you worked that way.

You can guess the common denominator involved - Unions.
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