UAW may give up jobs bank to revive auto loans

December 20, 2008

The United Autoworker’s Union (UAW) is currently involved in negotiations that would eliminate it controversial jobs bank. Furthermore, the UAW may be open to other concessions that will help the major Detroit automakers qualify for the low-cost loans being offered by the federal government.

For many union officers, particularly from locals, there was some uncertainty about whether the concessions would go forward, but there was agreement among most that the jobs bank would definitely be closed down as a part of the proposed plan. During a news conference at the UAW’s headquarters in Detroit, Gettelfinger was not inclined to say whether the union would be willing to give up the jobs bank if required by Congress as a condition of a loan bailout. The truth of this claim will be substantiated once UAW President Ron Gettelfinger and Detroit Three CEOs reconvene with Congress this month.

The major problem that many have with the UAW jobs bank was that would provide extended payments to laid-off works, often for several years. It began to be regarded as an outmoded and heavily abused program in need of restructuring or outright removal.

When UAW autoworkers become laid off, they provided with a combination of unemployment benefits and supplemental pay from their employer for 48 weeks. If the layoff lasted longer than that, the worker had the option of joining the jobs bank. Here, the company would provide about 95% of their pay and benefits.

During recent hearing, several members of Congress were quoted as saying that any proposal offered by automakers and the UAW would involve sacrifice on all sides, regardless of employment level. Neither hourly workers nor salaried executives were exempt. For its part, the jobs bank is considered as just another example of paying people not to work. It is derided as an example of what is seriously wrong with American’s automobile industry.