The UAW agreed earlier this week to allow Chrysler to do away with its Job Bank, and the union announced on Wednesday that it will give General Motors the same concession. The elimination of the Job Bank was a crucial provision of the government’s $17.4 bailout package to Chrysler and GM.
GM currently has about 1,600 workers in its Job Bank, but those employees will have to file for state unemployment starting Monday. However, they will still receive some supplemental benefits from GM.
The elimination of the Job Bank should save GM quite a lot in payroll expenses. Whereas employees in the Job Bank made nearly 100 percent of their normal wages – despite not having to report for work – the new system will see out-of-work employees making about 72 percent of their normal wages, according to Automotive News.
Further Job Bank savings could also be in the works as GM is currently negotiating with the UAW to reduce or completely do away with supplemental payments.
