Adding more workers to the job banks
According to General Motors, they will close 8 plants, reduce production at 3 plants, close 2 parts centers and convert one parts center into a crash parts warehouse. This will result in a reduction of 30,000 North American hourly jobs by the end of 2008 and an estimated savings of $7 billion.
General Motors employs approximately 325,000 people worldwide, of that 142,000 are hourly wage earners. The bulk of the hourly wage earners, 106,000 people, are United Auto Workers (UAW). There are almost 12,000 Canadian Auto Workers(CAW). Canadian workers do not have job banks.
Of the 30,000 jobs that will be lost by this reduction about 15,000 will be from attrition and retirement. 15,000 will be from plants “ceasing operations” in the United States and Canada. Part of the agreement between General Motor and the UAW is that GM cant close a plant without the UAWs permission, so technically they are ceasing operations till the contract expires in September of 2007.
Another part of the agreement is that if the employees dont accept a retirement or buyout package GM could be saddled with a job banks bill over $1 billion. Right now GM has somewhere around 7,000 employees playing bridge in a hall costing them somewhere around $840,000,000. Any employees that dont take the package will go into the hall and cost GM around $120,000 per person per year.
This part of the contract has taken what is considered by all other companies in the United States as a variable expense and made it a fixed expense for GM, Ford, Delphi and Visteon. Delphi has 4,000 employees in job banks. Maybe Delphis CEO, Steve Miller, should make a deal with the job banks group; you allow us to fire you and we will prorate that hourly wage to the employees who are actually working. There are approximately 30,550 U.S. hourly workers at Delphi. Lindsey Williams, Corporate Affairs for Delphi, a Tier One Supplier that was spun off from General Motors says that they want job banks to go away and for the Delphi UAW members to take a reduction in pay, “Delphi is still working with the UAW and General Motors. We didnt go directly to the courts for immediate relief. There is no winner if there is a strike.”
General Motors problems wont be solved if they get rid of job banks or even if the UAW makes concessions. They will still have to make cars that people want and while there are some great cars coming down the pike from GM, all the other companies have great cars too.