The UAW has agreed to let Chrysler LLC end its Jobs Bank on Monday as it seeks to help Chrysler meet the labor-saving terms of its federal bailout before a Feb. 17, deadline, a UAW official said today.
Workers in the Jobs Bank will be laid off Monday and have to go on state unemployment and supplemental pay, said the UAW official who asked not to named because the union has not made an official announcement.
Unemployment and supplemental pay is about two-thirds of an autoworkers gross pay vs. 100 percent for the Jobs Bank, the official said. Officially, a worker in the Jobs Bank is not laid-off but awaiting another assignment.
Chrysler UAW locals were notified of the decision in a letter Thursday from UAW Chrysler department vice president General Holiefield. A UAW spokesman could not be reached for comment today.
"Chrysler continues to work closely with its UAW partners to comply with the terms and conditions outlined in the government loan agreement," said Chrysler spokeswoman Shawn Morgan in a statement. "Discussions with the UAW will continue as we jointly work together to meet the timing deadlines established."
General Motors spokesman Tony Sapienza said the carmaker is discussing the subject with the union but would not comment further.
The letter was reported earlier today by Bloomberg News.
The UAW agreed to suspend the Jobs Bank last month so Chrysler and GM could qualify for $17.4 billion in federal bailout loans.
The government term sheets for the loans prohibit Chrysler and GM from paying idled workers any supplemental pay beyond what they would receive from unemployment.
When CEOs of the Detroit 3 testified before Congress on behalf of their request for federal loans late last year, lawmakers criticized the Jobs Bank program, which pays workers who are not working, as an example of featherbedding.
The local union official said the future of supplemental pay is subject to negotiation with the companies. UAW President Ron Gettelfinger said the union has been talking regularly with the Detroit 3 about the loan provisions, but have not engaged in official negotiations.
By the February deadline, GM and Chrysler must also negotiate concessions with the UAW on retiree health care. They also must get savings from other stakeholders, such as dealers, suppliers and bondholders.