WAYNE -- Ken Pool is making good money. On weekdays, he shows up at 7 a.m.
at Ford Motor Co.'s Michigan Truck Plant in Wayne, signs in, and then starts
working -- on a crossword puzzle. Pool hates the monotony, but the pay is
good: more than $31 an hour, plus benefits.
"We just go in and play crossword puzzles, watch videos that someone brings
in or read the newspaper," he says. "Otherwise, I've just sat."
Pool is one of more than 12,000 American autoworkers who, instead of
installing windshields or bending sheet metal, spend their days counting the
hours in a jobs bank set up by Detroit automakers and Delphi Corp. as part
of an extraordinary job security agreement with the United Auto Workers
The jobs bank programs were the price the industry paid in the 1980s to win
UAW support for controversial efforts to boost productivity through
increased automation and more flexible manufacturing.
As part of its restructuring under bankruptcy, Delphi is actively pressing
the union to give up the program.
With Wall Street wondering how automakers can afford to pay thousands of
workers to do nothing as their market share withers, the union is likely to
hear a similar message from the Big Three when their contracts with the UAW
expire in 2007 -- if not sooner.
"It's an albatross around their necks," said Steven Szakaly, an economist
with the Center for Automotive Research in Ann Arbor. "It's a huge number of
workers doing nothing. That has a very large effect on their future earnings
General Motors Corp. has roughly 5,000 workers in its jobs bank. Delphi has
about 4,000 in its version of the same program. Some 2,100 workers are in
DaimlerChrysler AG's Chrysler Group's job security program. Ford had 1,275
in its jobs bank as of Sept. 25. The pending closure of Ford's assembly
plant in Loraine, Ohio, could add significantly to that total. Those numbers
could swell in coming years as GM and Ford prepare to close more plants.
Detroit automakers declined to discuss the programs in detail or say exactly
how much they are spending, but the four-year labor contracts they signed
with the UAW in 2003 established contribution caps that give a good idea of
the size of the expense.
According to those documents, GM agreed to contribute up to $2.1 billion
over four years. DaimlerChrysler set aside $451 million for its program,
along with another $50 million for salaried employees covered under the
contract. Ford, which also maintained responsibility for Visteon Corp.'s UAW
employees, agreed to contribute $944 million.
Delphi pledged to contribute $630 million. In August, however, Delphi
Chairman and Chief Executive Officer Robert S. "Steve" Miller said the
company spent more than $100 million on its jobs bank program in the second
"Can we keep losing $400 million a year paying for workers in the jobs bank
and $400 million a year on operations? No, we cannot deal with that
indefinitely," Miller said in a recent interview with The Detroit News. "We
can't wait until 2007."
The jobs bank was established during 1984 labor contract talks between the
UAW and the Big Three. The union, still reeling from the loss of 500,000
jobs during the recession of the late 1970s and early 1980s, was determined
to protect those who were left. Detroit automakers were eager to win union
support to boost productivity through increased automation and more
The result was a plan to guarantee pay and benefits for union members whose
jobs fell victim to technological progress or plant restructurings. In most
cases, workers end up in the jobs bank only after they have exhausted their
government unemployment benefits, which are also supplemented by the
companies through a related program. In some cases, workers go directly into
the program and the benefits can last until they are eligible to retire or
return to the factory floor.
By making it so expensive to keep paying idled workers, the UAW thought
Detroit automakers would avoid layoffs. By discouraging layoffs, the union
thought it could prevent outsourcing.
That strategy has worked but at the expense of the domestic auto industry's
American automakers have produced cars and trucks even when there is little
market demand for them, forcing manufacturers to offer big rebates and
"Sometimes they just push product on us," said Bill Holden Jr., general
manager of Holden Dodge Inc. in Dover, Del., who said this does not go over
well with the dealers. "But they've got these contracts with the union."
In Detroit's battle against Asian and European competitors that are
unencumbered by such labor costs, the job banks have become a major
Breaking the banks
Analysts say the jobs bank could be a bigger issue than health care in the
2007 contract negotiations, particularly at Ford. It has a younger work
force than GM, meaning any workers Ford sends to the bench are likely to
stay there for a while.
"Ford is under pressure from investors to cut costs," said Roland Zullo, a
research scientist at the University of Michigan's Institute of Labor and
Industrial Relations. "At the same time, the unions are going to be under
pressure to protect jobs."
Given that, he expects a compromise that allows for the jobs bank to
continue but not on the scale of the current programs. "There's going to be
a lot of give and take," he said.
But does the jobs bank make any sense in a climate of shrinking profits and
declining market share?
"Labor wants the (jobs bank) because they want protection for their
members," Zullo said. But he added that the jobs bank was also designed to
help the companies by ensuring that skilled workers did not take their
"Companies invest in training," he said. "It protects that investment."
The investment only makes sense when viewed from a long-term perspective, a
vantage point Wall Street is not known to favor.
"If they're going after the job banks, that would signal to me that the
folks at the top have lost faith in their ability to recoup market share,"
Zullo said. "That would suggest to me that they really don't see a
Analysts and labor experts believe some sort of compromise is inevitable as
pressure builds on Detroit automakers to lower operating costs.
"The union probably realizes the money to pay for these programs probably
doesn't exist," Szakaly said. "There's going to have to be some give on the
While the job banks may exemplify the sort of excesses that give unions a
bad name, experts say it is wrong to cast all the blame in the direction of
Solidarity House. He said the leaders of GM, Ford and Chrysler also bear
some responsibility for the current problems.
"If these guys built cars people wanted, this wouldn't even be an issue,"
'Put out to pasture'
That view was echoed by Dan Cisco, another member of the jobs bank at
Michigan Truck, as he drained a cup of coffee with Pool and other idled
workers at Rex's restaurant in Wayne last week.
Ten members of UAW Local 900 are currently assigned to the jobs bank at
Michigan Truck. They are all gun-welder repairmen -- or "gunnies." It is a
classification each says they earned through decades of hard work.
And none of them is ready to give it up.
While some might envy their life of leisure, workers like Cisco, 56, feel
humiliated by the program.
"I felt like I was useless -- like I was put out to pasture," he said. "It's
just like how they treated the veterans. During the war, we were heroes.
When we came back ... "
Cisco adjusts his cap, emblazoned with the familiar silhouette of a captive
American POW, and sighs.
Michigan Truck, which builds the Ford Expedition and Lincoln Navigator
full-size SUVs, used to be one of Ford's most profitable plants. Today, the
nation is turning away from the big trucks and sport utility vehicles it
Cisco, Pool and eight other gunnies from Michigan Truck have been in the
jobs bank program since their positions were eliminated in July. They all
have more than 36 years with Ford and are among the highest-paid workers in
the plant. They say the company is asking them to accept one of the $35,000
retirement packages it is offering to trim its blue-collar headcount.
Most say they have no interest in retiring -- or spending the rest of their
careers doing crossword puzzles.
"We want training," Dale Hall said.
Classes are available, the workers said. They have been invited to take
courses on bicycle repair, home wiring and poker. Silk-flower arranging is
"They might as well just give us a basket-weaving class, set us in the
corner and let us feed the pigeons," Cisco said.
Not everyone in the jobs bank is spending their time marking it.
Dan Costilla, a member of UAW Local 602 in Lansing, was a body shop worker
at GM's Lansing car assembly plant until it was closed in May. Now, instead
of grinding joints, he rides herd over 16 of his former plantmates, making
sure they keep their appointments at the local thrift store or Head Start
"I'm making sure that everything's going smooth," he said.
In the five months since Costilla and his co-workers have been unemployed,
they have been busy mowing lawns for the handicapped, patching roofs for
senior citizens and chaperoning youngsters on field trips to the zoo. It is
all part of a community service effort organized by the union, with the
support of the company.
"They realized you could only sit so long at the job bank office," Costilla
said. "Your bones, they get sore after a while sitting down."
Bob Bowen, former president of UAW Local 849 in Ypsilanti, said the original
intent of the jobs bank program was that idled workers would be gainfully
employed on community projects or learning new skills -- real ones that they
could actually use on the assembly line.
"The idea was not to have people loafing," Bowen said. "But that was a
The problem, he said, lies in the way the jobs bank is administered.
Instead of setting up a central authority to manage them, responsibility was
largely left to union locals across the country. Some organized community
projects and job training. Others passed out decks of cards and hooked up
Ken Pool said he can only take so many more World War II documentaries and
He and the other members of Michigan Truck's jobs bank planned to meet with
a lawyer. They have already filed numerous grievances, accusing the company
of age discrimination, but have heard nothing from the union or the company.
Now they are going to see if the courts can help.
As for Costilla and his colleagues, they are getting ready to go back to
work at GM's new Delta Township plant. Costilla acknowledges that many of
the union members are not looking forward to going back to work at the
"The majority of us would rather stay here doing what we're doing," he said.
"You're not on the line, chasing a car."