General Motors will suspend its ‘jobs bank’ programme on Monday – all of Detroit’s Big Three automakers have now announced such a move this week.
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About 1,600 workers will now be classified as laid off and must apply for state and federal unemployment benefits. Dow Jones reported. Workers would receive some GM-subsidised payments along with their unemployment benefits which means they would continue to earn about 72% of their pay.
The move will allow cash-strapped GM to use state unemployment benefits to help cover some of the costs of paying the workers, the report said.
“We continue to restructure for long-term viability,” GM spokesman Tony Sapienza told the news agency.
Part of that restructuring included talks with the key United Auto Workers (UAW) union about continued “sub pay” contributions and other issues, Sapienza said.
Chrysler ended its jobs bank programme earlier this week and moved about 1,000 union workers to layoff status while Ford on Wednesday said, in its fourth quarter results statement, it, too, had agreed with the UAW to end the programme and was working out the details.
Ending the jobs bank was a condition of the recent US federal government loans to GM and Chrysler.
The US auto makers had been required under UAW contracts to ‘bank’ employees when there were production cutbacks, Dow Jones said. Workers usually received 85% or more of their pay – through benefits and sub pay – even though they don’t do any work.
Ford today said it was still working out the details with the UAW – Dow Jones said the automaker had about 1,400 workers in its bank in November.
Separately, the news agency added, US Treasury Department officials said GM and Chrysler must submit monthly milestones and actions to be taken on a monthly basis to the end of 2010 to the agency by 17 February.
That requirement also was part of the $17.4bn loan package the two received from the federal government last month.
The information was disclosed in new loan documents released by the US Treasury Department, the news agency said. Detailed restructuring plans are due on or before 17 February and the plans need to include details on how labour costs and bondholder agreements will be modified.
