GM spokesman Tony Sapienza said Wednesday that the 1,600 GM workers in the jobs bank will be placed on layoff and will need to file for unemployment. They'll receive about 72 percent of their salaries, paid by state unemployment benefits and GM subsidies. The workers also will get medical and other benefits from the company. The length of time workers can receive unemployment benefits varies from state to state but usually amounts to about 48 weeks, Sapienza said. After that, they'll no longer get paid.
Christine Moroski, a spokeswoman for the United Auto Workers union, declined to comment.
Sapienza said the move will allow cash-strapped GM to use state unemployment benefits to help cover some of the costs of paying the workers.
"We really appreciate the union's willingness to work with us as we continue to restructure for long-term viability," Sapienza said.
UAW President Ron Gettelfinger said in early December that the union would suspend the jobs bank, after members of Congress criticized the money-seeking automakers for paying workers who are not on the job. Some Republicans sought more concessions from the union, and a bill to provide loans to GM and Chrysler died in the Senate before the Bush administration stepped in to grant aid.
Each automaker's jobs bank varies, but at GM, laid-off workers could get 85 percent of their base pay, plus benefits, without reporting to work while the company tried to find them jobs elsewhere. Or workers could get full pay by reporting to a factory or union hall, where they could be called upon to perform community service or tasks around the plant.
Union officials said late last week that Chrysler was eliminating its jobs bank effective Jan. 26. Like at Detroit-based GM, Chrysler's affected workers will continue to receive supplemental pay to make up much of their wages after unemployment compensation.
Auburn Hills, Mich.-based Chrysler was also required to eliminate its jobs bank as a condition of its $4 billion in Treasury Department loans. GM was granted $13.4 billion and already has received $9.4 billion of those funds.
The terms of the loans call for GM and Chrysler to eliminate "the payment of any compensation or benefits to U.S. employees of the company or any subsidiary who have been fired, laid-off, furloughed, or idled, other than customary severance pay." It has been unclear whether this provision also requires the companies to eliminate the supplemental pay they provide while workers collect unemployment benefits.
Both automakers must submit plans by Feb. 17 showing that they can become viable. If the Treasury isn't satisfied with the plans, the government could call in the loans at the end of March. Ford Motor Co. didn't take any government money, but company officials and Gettelfinger have said they expect the Dearborn, Mich., automaker to get the same concessions as the other companies so it's not disadvantaged.
Ford spokeswoman Marcey Evans said Wednesday that talks continue between the automaker and the union about the future of the jobs bank, which included about 1,400 Ford workers as of November.
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