Chrysler Ends 'Jobs Bank' Pay For About 1,000 Union Workers
27 January 2009 - 5:21AM
Dow Jones News
Chrysler LLC, in a cost-cutting deal struck with the United Auto
Workers, suspended its "jobs bank" program Monday, impacting about
1,000 union workers.
The UAW and Chrysler reached a deal late last week to
temporarily end the program, which requires the auto maker to
"bank" employees rather than firing them during production
cutbacks. Workers in the program receive more than 85% of their pay
based on state unemployment benefits and "sub pay" provided by the
company.
Chrysler hasn't publicly commented on the program's suspension
since UAW discussions are private. UAW sources confirmed the
program's suspension Monday.
Closing the jobs bank was one of the terms Chrysler, General
Motors Corp. (GM) and the union had to agree to in order to
continue accessing low-interest loans from the federal government.
Chrysler and GM both received approval last year to access money to
avoid bankruptcy.
Chrysler has received $4 billion and is waiting on another $3
billion, while GM has received $9.4 billion and hopes to access
another $4 billion. Both companies have to submit viability plans
on March 31.
GM spokesman Tony Sapienza said the auto maker is also in talks
with the UAW on suspending the program. He didn't disclose how many
workers are in the program.
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, receiving anywhere from 80% to
100% of their pay.
Shares of Ford rose 12.2% to $2.02 in trading Monday. GM shares
were down 2% at $3.42.
-By Jeff Bennett, Dow Jones Newswires; (248) 204-5542;
jeff.bennett@dowjones.com
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