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And you wonder why the big 3 are going bankrupt

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And you wonder why the big 3 are going bankrupt
« on: November 13, 2008, 02:29:26 PM »
Money for nothing!!  This is yet another reason why Unions have ruined this country.  I say let them fail, file bankruptcy, and start over with new management and non-union workers.

http://wsjclassroom.com/archive/06may/auto2_jobsbank.htm

Money for Nothing
U.S. Car Companies Pay Hundreds of Millions of Dollars in Wages to Idled Workers

By Jeffrey McCracken
Staff Reporter of The Wall Street Journal

In his 34 years working for General Motors, one of Jerry Mellon's toughest assignments came this January.

He spent a week in the "rubber room."

The room is a windowless old storage shed in Flint, Mich. It is filled with long tables, Mr. Mellon says, and has space for about 400 employees. They must arrive at 6 a.m. each day and stay until 2:30 p.m., with 45 minutes off for lunch. A supervisor roams the aisles, signing people out when they want to use the bathroom.

Their job: to do nothing.

This is the Jobs Bank, a two-decade-old program in which nearly 15,000 auto workers continue to get paid after their companies stop needing them. To earn wages and benefits that often top $100,000 a year, the workers must perform some company-approved activity. Many volunteer or go back to school. The rest clock time in the rubber room or something like it.

It is called the rubber room, Mr. Mellon says, because "a few days in there makes you go crazy."

The Jobs Bank at GM and other U.S. auto companies including Ford Motor is likely to cost around $1.4 billion to $2 billion this year. The programs, which are up for renewal next year when union contracts expire, have become a symbol of why Detroit struggles even as Japanese auto makers with big U.S. operations prosper.

'Designed for a Different Time'

While GM often blames "legacy costs" such as retiree health care and pensions for its troubles, its Jobs Bank shows that the company has inflicted some wounds on itself. Documents show that GM itself helped originate the Jobs Bank idea in 1984 and agreed to expand it in 1990, seeing it as a stopgap until times got better and workers could go back to the factories. The idea was to help train or find jobs for senior UAW employees who would "otherwise be permanently laid off" because of better technology or higher productivity. Ford later matched the plan for its UAW employees.

"The bank was designed for a different time, a time when we were growing," says Pete Pestillo, a former Ford executive who oversaw union talks. The Jobs Bank has failed to stop the outflow of jobs at Detroit's unionized auto makers. Since 1990, GM's union payroll, including former subsidiary Delphi, has fallen to about 137,000 from 358,000. Many have retired, died or found other jobs. The rest are in the Jobs Bank.

Mr. Mellon, 55, joined GM in 1972, following his grandfather and his father. Through the 1980s and 1990s, Mr. Mellon held jobs designing electronic systems for vehicle prototypes. In 2000, GM merged two engineering divisions, and he wasn't needed anymore.

Since then, except for a period in 2001 when he worked on a military-truck project, GM has paid him his full salary for not working. That is currently $31 an hour, or about $64,500 a year, plus health care and other benefits.

About 7,500 GM workers are now in the Jobs Bank, more than double the figure a year ago. Each person costs GM around $100,000 to $130,000 in wages and benefits, according to internal union and company figures, meaning GM's total cost this year is likely to be around $750 million to $900 million.

One way employees in the Jobs Bank can fulfill their requirements is to attend eight- or 12-week classes offered by GM. In these classes, Mr. Mellon has studied crossword puzzles, watched Civil War movies and learned about "manmade marvels like the Brooklyn Bridge," he says. One class taught him how to play Trivial Pursuit. More recently, he attended an institute in Flint called the Royal Flush Academy. It is designed for those seeking work in casinos. Mr. Mellon says he isn't interested in casino work and left the academy after they docked his pay because he was 10 minutes late coming back from lunch.

With that he arrived at the rubber room. Every day for a week Mr. Mellon got up at about 4:30 a.m. to make the 45-minute commute to the rubber room from his home in Otisville, Mich. At first he read the newspaper or magazines lying around, such as Reader's Digest. He talked some with acquaintances. After conversation dried up, he says he spent hours staring at the wall, hoping time would move faster.

The waiting "makes you want to bang your head against the wall," Mr. Mellon says. "I couldn't take it. I need to be doing something. And there is a supervisor who walks around staring at everyone. It's worse than high-school detention."

Mr. Mellon thinks a "line-worker mentality" keeps people going back to the rubber room. "A lot of guys sit in that room and just collect their paycheck because they don't know what else to do," he says. "They've spent 20 years tightening a nut as it came down the line. They are faced with this harsh reality, and they are just happy the paycheck still comes so they can put their kid through college."

Mr. Mellon soon found a way to escape the room, through volunteering. He recently arranged to do community service work at Freedom Temple, a Baptist church in Flint. He is installing motion sensors at the homes of senior citizens in a bad part of town.

Corrosive Influence

Mr. Pestillo, the former Ford executive, and others see the Jobs Bank as a corrosive influence with significant indirect costs because it encourages auto makers to build more vehicles than consumers want. Companies figure it is better to build cars with little or no profit margin than to pay people not to work, he says. They also may keep rote work in-house even though it would be cheaper to outsource.

The system gives older union workers little incentive to move to other plants, find jobs at other companies or retire. There is no limit on how long a worker can stay in the Jobs Bank. They don't have to look for work at their company. Contracts allow workers to turn down any job offer at a site farther than 50 miles from their home plant.

Detroit's Big Three auto makers are likely to seek reductions in the program when they renegotiate their contracts with the UAW next year. It may be difficult for the UAW to keep the Jobs Bank intact, not only because of the public-relations problem but also because it is hindering a settlement to get Delphi out of bankruptcy-court protection.

In Flint, Mr. Mellon also sees change on the horizon. "I understand the Jobs Bank needs to have an end to it," he says. "I mean, they've paid me like $400,000 over six years to do nothing, to learn to deal blackjack. But buy me out. Retire me with something like $2,000 for every year I worked. I need that because you know they're going to keep cutting our health care and pensions. You are so vulnerable in retirement."





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Jumbo

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Re: And you wonder why the big 3 are going bankrupt
« Reply #1 on: November 13, 2008, 06:21:12 PM »
That is some stupid shit.
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Saniflush

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Re: And you wonder why the big 3 are going bankrupt
« Reply #2 on: November 14, 2008, 08:05:17 AM »
It is not enough that they have fucked up their companies but the UAW are doing everything they can to get into the car manufactures in the South and fuck them up as well.
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"Hey my friends are the ones that wanted to eat at that shitty hole in the wall that only served bread and wine.  What kind of brick and mud business model is that.  Stick to the cart if that's all you're going to serve.  Then that dude came in with like 12 other people, and some of them weren't even wearing shoes, and the restaurant sat them right across from us. It was gross, and they were all stinky and dirty.  Then dude starts talking about eating his body and drinking his blood...I almost lost it.  That's the last supper I'll ever have there, and I hope he dies a horrible death."

Tarheel

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Re: And you wonder why the big 3 are going bankrupt
« Reply #3 on: November 14, 2008, 02:32:31 PM »
As much as it pains me to write this it's just another example of why these companies should fail or go bankrupt.  It might even improve them...I just flew on Delta a few days ago and they were probably the best they've been in years (not that it's saying much but their service got really shitty for a while).
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The question isn't who is going to let me; it's who is going to stop me. 
-Ayn Rand

The problem with socialism is that eventually you run out of other people's money.
-The Right Honourable Margaret Thatcher

The government solution to a problem is usually as bad as the problem.
-Milton Friedman

The nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.'
-Ronald Reagan

When the people fear their government, there is tyranny; when the government fears the people, there is liberty.
-Thomas Jefferson

Saniflush

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Re: And you wonder why the big 3 are going bankrupt
« Reply #4 on: November 14, 2008, 02:55:29 PM »
I just flew on Delta a few days ago and they were probably the best they've been in years (not that it's saying much but their service got really shitty for a while).

Not to mention they have three sizes of flight attendants.  Small, medium , and overseas. 
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"Hey my friends are the ones that wanted to eat at that shitty hole in the wall that only served bread and wine.  What kind of brick and mud business model is that.  Stick to the cart if that's all you're going to serve.  Then that dude came in with like 12 other people, and some of them weren't even wearing shoes, and the restaurant sat them right across from us. It was gross, and they were all stinky and dirty.  Then dude starts talking about eating his body and drinking his blood...I almost lost it.  That's the last supper I'll ever have there, and I hope he dies a horrible death."

AUTailgatingRules

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Re: And you wonder why the big 3 are going bankrupt
« Reply #5 on: November 19, 2008, 04:36:25 PM »
Big 3 fly to Washington on their fancy private jets to ask for taxpayer bailout :flag:

http://abcnews.go.com/Blotter/WallStreet/story?id=6285739&page=1
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RWS

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Re: And you wonder why the big 3 are going bankrupt
« Reply #6 on: November 19, 2008, 04:59:21 PM »
if they bail them out, we need to start seeing some $12,000 F350s or something. why should we reward them for fucking themselves? my father-in-law has a manufacturing business that isn't doing so well right now because of the slowdown. however, he has always been fiscally responsible with the business and has the money set aside to get through it. sometimes he will go without his dividends when he doesn't need the extra money or won't take pay for a month just to help the business that much more. if we bail these fuckers out, they're going to be in the same position again in 3-5 years anyway. let them go thru bankruptcy like everybody else and actually make them become more responsible.
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AUTailgatingRules

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Re: And you wonder why the big 3 are going bankrupt
« Reply #7 on: November 19, 2008, 05:03:57 PM »
if we bail these fuckers out, they're going to be in the same position again in 3-5 years anyway. let them go thru bankruptcy like everybody else and actually make them become more responsible.
[/quote]

Try 3-5 months, they are losing billions a quarter right now
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Tarheel

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Re: And you wonder why the big 3 are going bankrupt
« Reply #8 on: November 19, 2008, 05:11:05 PM »
if we bail these fuckers out, they're going to be in the same position again in 3-5 years anyway. let them go thru bankruptcy like everybody else and actually make them become more responsible.


Try 3-5 months, they are losing billions a quarter right now

Maybe the ought to get out of the benefits and health care business and get back to the business of making cars.
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The question isn't who is going to let me; it's who is going to stop me. 
-Ayn Rand

The problem with socialism is that eventually you run out of other people's money.
-The Right Honourable Margaret Thatcher

The government solution to a problem is usually as bad as the problem.
-Milton Friedman

The nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.'
-Ronald Reagan

When the people fear their government, there is tyranny; when the government fears the people, there is liberty.
-Thomas Jefferson

RWS

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Re: And you wonder why the big 3 are going bankrupt
« Reply #9 on: November 19, 2008, 05:11:49 PM »
if we bail these fuckers out, they're going to be in the same position again in 3-5 years anyway. let them go thru bankruptcy like everybody else and actually make them become more responsible.


Try 3-5 months, they are losing billions a quarter right now
they say that they have to offer deep discounts to sell cars, therefore they don't make a profit. has it ever occured to them that maybe people just don't want to buy cars right now? cars are not like groceries or something. at some point you will have alot of people in the country driving a car less than 5 years old, or a car that is still in good shape that may be a little older than 5 years old. not every person in the country is going to be a dumbass like me and buy/trade 3 new vehicles in a span of 4 years and be upside down to their eyeballs in a car.
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"You're too stupid to realize that I'm one of the levelheaded Auburn fans around here" - The Prowler