Friday, July 13, 2007

Big 3 seek to shut jobs bank

Monday, July 02, 2007
Big 3 seek to shut jobs bank
Union won't back down easily from program it fought decades to win
Louis Aguilar / The Detroit News

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 Auto Workers.

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 have.

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 were left.

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 the expense.

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 million.

"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 many plants.

"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 way?"

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 future.

"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 area businesses.

"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 neighborhoods.

"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?"

You can reach Louis Aguilar at (313) 222-2760 or

© Copyright 2007 The Detroit News. All rights reserved.


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