Next is ending, rather than suspending, the jobs bank at GM and Ford
Chrysler jobs bank ends Monday
In a letter obtained by the Free Press, General Holiefield, the UAW's vice president of the Chrysler department, told members that the change was to comply with the terms of the federal loan agreement that gave Chrysler $4 billion to stay afloat.
"Without this loan, the corporation would most certainly" have "been forced to file for bankruptcy protection," he wrote in the letter dated Thursday.
"In order to be in compliance with the mandate, the jobs bank will be eliminated effective Jan. 26," he added. "Employees that are either in the jobs bank or would have been in the bank will be placed on unemployment ... until such time that we have a clarification of all of the stipulations ... in the 'terms of agreement.' "
Chrysler told employees in a letter Friday that workers now in the jobs bank would be placed on "enhanced layoff," effective Monday, until a final agreement has been reached with the UAW.
Workers going into enhanced layoff were advised to apply for jobless benefits and told they will keep medical, dental and group life insurance during that time.
Holiefield advised members that the changes are temporary until negotiations are completed.
"It is important that everyone understand that these provisions will only be in effect until such time as the mandates from the U.S. Treasury Department have been clarified," he wrote.
Chrysler and General Motors must present viability plans to the government by Feb. 17 and convince the government they are viable by March 31 or face losing the loans.
Chrysler and GM received the loans with terms targeting more UAW concessions, including reducing compensation to be more in line with foreign competitors operating U.S. plants.
The terms also called for the "elimination of 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."
Chrysler issued a statement Friday that it continues "to work closely with its UAW partners to comply with the terms and conditions outlined" by the government.
A UAW spokesman didn't respond to questions.
Meanwhile, GM's jobs bank is still under negotiation with the UAW, company spokesman Tony Sapienza said.
Late last year, GM reduced the amount of money paid to workers in the jobs bank program and stopped having them report to a company facility, he said. Now GM workers in the jobs bank stay home and collect about 85% of their pay.
Ford Motor Co., which did not take a government loan, has ongoing talks with the UAW, said Mark Fields, Ford's president of the Americas. He declined to say whether the jobs bank program was part of those discussions.
In December, UAW President Ron Gettelfinger said the union would be willing to suspend the jobs bank and allow the automakers to delay payments into a retiree health care trust set up as part of the 2007 labor agreement.
Speaking about the jobs bank provision last year, Gettelfinger said it had already been severely reduced. He characterized it as a "mere shadow of what it used to be."
Gettelfinger said then there were about 700 Chrysler workers, 1,400 Ford workers and 1,400 GM workers in the respective jobs banks.
UAW autoworkers went into the jobs bank if they remained laid off beyond
48 weeks, during which time they received a combination of unemployment benefits and supplemental pay from their employer. In jobs bank, the company provided about 95% of their pay and benefits.Lawrence Faw, 47, of Warren, has been in Chrysler's jobs bank for four years, after losing his job as a welder at Chrysler's Warren truck assembly plant in 2005. He has spent most of his time volunteering through the jobs bank at two churches in Warren.
Besides the jobs bank, Faw expects to receive unemployment insurance and money from supplemental pay, leading to a pay cut of about 10%.
"My biggest concern is for the charities," Faw said. "Now the workers are getting less money and the charities don't have the bodies."