GM, UAW reach deal limiting 'jobs bank' for workers

By From Reuters| May 25 2007
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General Motors reached a pioneering deal with the UAW union that will force almost 400 workers out of a "jobs bank" program that guarantees nearly full wages and benefits when the automaker eliminates work or closes factories.

Under the deal, about 400 GM workers with specialized jobs in Flint and Lansing, Mich., will have to accept buyout or early retirement offers or accept other positions with the automaker, GM said today.

GM and its Detroit-based rivals, Ford Motor Co. and the soon-to-be private Chrysler group, all face a crucial round of contract talks with the UAW this summer to replace a four-year deal on wages and benefits that expires in September.

The "jobs bank" program, which the automakers and the union created in the 1980s, is expected to be one of the hot-button issues up for discussion.

GM and other automakers had intended the work guarantee to yield productivity gains by convincing unionized workers that their jobs would be protected even if they helped to introduce cost-saving processes and equipment.

But more recently the program has been seen by some Wall Street analysts as a symbol of the entrenched costs that have contributed to the deep losses for U.S. automakers since it had effectively guaranteed pay without work for hundreds of former active workers.

GM has not disclosed how many employees it has in the bank after a program of UAW-endorsed buyouts and early retirement offers eliminated 34,410 workers from its payroll last year.

GM spokesman Dan Flores said the UAW had agreed that about 85 skilled trades workers in Flint and some 300 in Lansing could agree to a number of choices as an alternative to staying in the bank.

A skilled trades worker has a recognized specialty such as welding or machine repair under the labor contract and is eligible for a higher hourly wage than unskilled workers.

"The only option they don't have is remaining in the jobs bank," Flores said.

GM has extended the same buyout offers to the 400 workers that it offered company-wide last year, including early retirement and buyouts of up to $140,000.

In addition, the automaker has offered to place the workers in another skilled trade, retrain them for new work, allow them to work in a production job at higher wage rates or relocate to a GM factory more than 50 miles away.

If the workers opt to move, GM will pay relocation costs of up to $67,000, Flores said.

The UAW workers have 45 days to consider their options under the offer, he said.

The 85 UAW skilled trades workers in the program in Flint have been out of work since GM idled its Buick City complex in the city in the late 1990s.

In Lansing, GM idled and subsequently tore down a massive car assembly plant and replaced it with two smaller facilities.

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