Big 3 seek to shut jobs bank
FLINT -- Paying factory workers nearly full wages and benefits even
when they no longer have jobs is a practice Detroit automakers hope to
drastically overhaul during contract talks this summer with the United
The two-decades-old program, known as the jobs bank, is costing the
companies billions of dollars at a time when they are losing billions.
Many also view it as symbol of a hidebound union that failed to change
with the times.
But at UAW Local 599 in Flint, General Motors Corp. workers staunchly
defend the jobs bank. They fought for many generations to secure their
middle-class lifestyle and don't believe they should give up the
safety net because someone in Mexico or China will build cars for a
few dollars a day.
Half of Flint job bankers were laid off during the first Clinton
administration; most others at the beginning of this century. Many
worked in a plant that no longer exists, the sprawling Buick City
complex that closed in 1999 and was razed.
Throughout those years, GM has paid them between $70,000 and $85,000
annually. They still enjoy health care coverage far more generous than
the typical American worker. They continue to collect years of service
toward their pensions, another benefit most U.S. workers no longer
While outsiders may criticize them for refusing to acknowledge that
such guarantees are unsustainable in today's ultra-competitive global
auto industry, they consider protecting the jobs bank a mission.
"We want to save the American auto industry," said Terry Everman, a
Local 599 official who helps oversee the jobs bank. "We know what kind
of trouble we face, but to give up the jobs bank is to give up
everything the union fought decades to win.
"None of these workers wanted to stay in the bank for this long. But
they stayed because GM made them a promise that if we cooperated,
which we have all along, if we worked hard and produced quality, which
we have, then we would keep our jobs. How do you save the American
auto industry by sacrificing the rights and protection of workers?"
Changing fortunes shift deal
The jobs bank was created more than 20 years ago in exchange for the
UAW's help in making auto plants more flexible and automated. The
union, bruised by the loss of half a million jobs during the recession
of the late 1970s and early 1980s, wanted to preserve the jobs that
The theory was that if GM and other automakers had to pay laid-off
workers, they would always make sure they had work.
But Detroit's automakers have lost huge chunks of market share and, as
importantly, have become more efficient, no longer needing as many
workers to run a plant.
The situation reached a boiling point as plant closings and production
cuts funneled more than 12,000 workers into jobs banks at GM, Ford
Motor Co. and the Chrysler Group.
Stories proliferated about jobs bankers sitting in rooms for eight
hours a day, filling out crossword puzzles, watching World War II
movies and even taking naps. It received less attention that many in
the jobs bank did important work in the community.
Waves of buyouts across the industry have reduced the number of
workers in jobs banks to about 4,200, a number that automakers
privately say is still untenable.
The UAW has recently shown a willingness to compromise. In May, GM cut
a deal with the UAW that will allow it to eliminate the jobs bank for
skilled trade workers in Flint and Lansing. Under the agreement, GM
can force workers who refuse buyout and early retirement offers to
retrain for another skilled trade, move to an unskilled production job
or relocate to a plant in another city or state. The program will
clear out 100 skilled trades workers in Local 599's jobs bank.
"This is about GM and the UAW continually looking for ways to improve
competitiveness," GM spokesman Dan Flores said.
Some see it as a trial run for how Detroit's automakers may try to
close the jobs bank for good during the coming contract talks.
Detroit automakers declined to say how much they currently spend on
their jobs banks, but the four-year labor contracts they signed with
the UAW in 2003 established contribution caps that give a good idea of
GM agreed to contribute up to $2.1 billion over four years. Chrysler
set aside $451 million for its program, along with another $50 million
for salaried union employees. And Ford agreed to contribute $944
"The domestic auto companies are playing by rules that no longer apply
to the 21st century global economy," said Dana Johnson, chief
economist for Comerica Inc.
Workers want promises kept
Job bankers like Dean Braid in Flint say the program should remain
until Detroit automakers start investing more in America rather than
shifting production to lower-cost countries.
"We made one of the best products in the world and yet, here we are,"
said Braid, a 28-year GM veteran, as he sat in the conference room at
Local 599 with several others in the jobs bank. He believes the UAW
granted too many concessions in recent years and agreed to close too
"Do we want the Wal-Mart standard for all workers?" he asked. "Who's
going to able to afford to buy a car or truck if we all get paid that
Workers at Local 599 say the cost of abandoning the jobs bank is too
high for union members in Flint and elsewhere, today and in the
"It's about the social contract being broken," said Everman, the UAW
Local 599 official. "It's about not letting the companies ship all
those jobs to Mexico and China. It's about not walking away from the
American worker. It's about not letting what happened to the American
steel industry happen to the American auto industry."
A long history of union clout
It's not hard to understand the workers' sense of betrayal after
spending time at Local 599 and in Flint, where the culture is grounded
in celebrating the auto industry and the jobs and rights the UAW
earned the hard way -- through strikes and tough bargaining.
The factories and jobs in Flint have been vanishing for decades, but
the workers aren't ready to give up on their ideals.
The lobby of Local 599 feels like a museum. It's quiet these days, as
membership has dwindled from a peak of 28,000 to 2,500.
A two-story montage of photos on the lobby wall displays the deep bond
between UAW and this broken city. There's a photo of throngs of UAW
workers involved in the storied Flint sit-down strike of 1936-37. The
strike legitimized the UAW as a powerful force.
There's a 1950s-era photo of President Truman visiting a local plant,
and a 1960s era photo of black and white GM workers sitting together
in a diner. Local 599 members played an active role in desegregating
"The UAW has set the standard for the common men and women in so many
ways, and for so long," said Local 599 President Bill Jordan. "General
Motors never gave us anything. We fought for every right we have."
A look outside Local 599 tells the story of how much has been lost.
The union hall now overlooks 235 acres of empty weed-choked concrete
where Buick City once stood.
At the time of its closing, it was ranked one of the top plants in the
world for efficiency and quality. But fewer and fewer people were
buying Buicks. When the plant closed, the brand accounted for 1
percent of the U.S. market.
What remains is Flint Powertrain North. The factory on the complex
that builds a 3.8-liter V-6 engine for GM passenger cars will be
shuttered in 2008. The entire facility will close two years later as
part of GM's plan to become profitable again in North America.
A physical sense of abandonment pervades much of Flint, from its
struggling downtown with boarded-up stores to its many desolate
"If GM would have built just one plant here that they built in Mexico,
we wouldn't have people in the jobs bank," Everman said. "And you know
Flint wouldn't be as bad off."
Jobs bank part of city's fabric
The jobs bank has been around so long at Local 599 that it will be a
painful rip in Flint's social fabric when the workers leave as a
result of the May agreement. Dozens of charities count on the idled
workers to collect toys for children, clean area parks, raise money
for veterans, build wheelchair ramps and organize food drives.
Braid spends at least 40 hours a week helping an old high school
friend, Doug Conn, who is in a wheelchair. Braid customized Conn's
1984 Econoline van, rebuilt his garage and made Conn's home in Owosso
more accessible by build ramps, among other things.
"He's been invaluable to me," Conn said as he watched Braid inspect
the van. "I hate it when guys like him are called lazy or noncaring.
That's just a lie."
Braid has heard all the arguments about how Detroit automakers need to
cut labor costs to become competitive and profitable. "I just ask, at
what cost are we going to sacrifice the rights of workers to save GM?"
he said. "What goal is being achieved by lowering the standard? Who
are the people who benefit from this? Does Flint look like it's
benefiting? Does Michigan look healthy to you?"