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GM to end 'jobs bank' Monday

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Associated Press and Gazette Staff
January 29, 2009
— General Motors said Wednesday that its "jobs bank" program will end Monday, affecting thousands for former Janesville GM plant employees.

GM's announcement comes after a similar move at Chrysler that helps satisfy the conditions that the government imposed when it lent the automakers $17.4 billion late last year.


The jobs bank program, which involves about 80 laid-off employees in Janesville, gives union workers at the Big Three automakers most of their pay and benefits while they are not working.


GM ended SUV production at its Janesville plant in December. Over the years, the number of employees in the Job Opportunity Bank-Security program has ebbed and flowed, with the current number at about 80, a source told The Janesville Gazette.


But the death of the jobs bank could be a significant loss for the 2,000 hourly GM employees laid off in Janesville in 2008 and expecting to eventually go into the program. The jobs bank would have extended their pay beyond the normal window provided by state unemployment and negotiated supplemental unemployment benefits.


Under the union contract, laid-off autoworkers receive unemployment benefits at near full pay for 48 weeksó26 weeks as a combination of state unemployment compensation and supplemental unemployment benefits and another 22 weeks of just supplement unemployment benefits.


After the 48 weeks are up, workers were to move into the jobs bank and receive up to 95 percent of their pay for two years. In return, workers had to accept job transfers to other GM facilities or be cut from the company's wage and benefits programs.


The program was the target of much criticism during the companies' requests for a federal bailout.


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 then will receive about 72 percent of their salaries, which will be paid by state unemployment benefits and GM subsidies.


The length of time workers can receive the benefits varies from state to state but usually amounts to about 48 weeks, Sapienza said.


Christine Moroski, a spokeswoman for the United Auto Workers union, declined to comment.


GM's Sapienza said the move will allow the cash-strapped automaker 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.


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 UAW president Ron Gettelfinger have said they expect the Dearborn, Mich., automaker to get the same concessions as the other companies so its not disadvantaged.



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