GM Confirms 'Jobs Bank' To End Monday Impacting 1,600 Workers
28 Januar 2009 - 6:42PM
Dow Jones News
DETROIT (Dow Jones)- General Motors Corp. (GM) will suspend its
"jobs bank" program Monday, becoming the second of the Big Three
U.S. auto makers to announce such a move this week.
About 1,600 workers will now be classified as laid off and must
apply for state and federal unemployment benefits. Workers will
receive some GM-subsidized payments along with their unemployment
benefits, which means they will continue to earn about 72% of their
pay.
GM is also in talks with the United Auto Workers to end its "sub
pay" contributions, GM spokesman Tony Sapienza said.
Chrysler LLC ended its jobs bank program earlier this week and
moved about 1,000 union workers to lay off-status.
GM, like Chrysler, needed federal loans to stave off collapse at
the end of last year; ending the jobs bank was a condition of the
government loans. GM and Chrysler must also submit a plan by March
31 showing how they will make more cost cuts and improve their
competitiveness if they hope to win more federal money. A status
hearing is set for Feb. 17.
The U.S. auto makers are required under UAW contracts to "bank"
employees when there are production cutbacks. Those workers usually
receive 85% or more of their pay - through benefits and sub pay -
even though they don't do any work.
Ford Motor Co. (F), which didn't take any federal money, is also
seeking similar concessions with the UAW. Ford has about 1,400
workers in the bank as of November.
Shares of Ford rose 3.6% to $2.04 in trading Monday. GM shares
were rose 1.5% to $3.40.
-By Jeff Bennett, Dow Jones Newswires; (248) 204-5542;
jeff.bennett@dowjones.com
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