The United Auto Workers union will end the so-called jobs bank for Chrysler LLC on Jan. 26 as a condition of the $4 billion U.S. loan made to the carmaker, dpa reported.
The union sent a letter to local presidents dated yesterday ordering that workers be sent home from the program, which kept employees on the payroll even though they had no duties to carry out at the company.
More benefits changes may follow to appease the government in its effort to make Chrysler and General Motors Corp. viable. Union President Ron Gettelfinger said this week his group would meet cost-saving requests, including becoming "competitive" with some Japanese companies in U.S. labor costs by Feb. 17, when GM and Chrysler must report progress to the U.S. Treasury.
The loan agreement with the Treasury Department includes a provision that "eliminates the payment of any compensation or benefits to employees that have been laid off, i.e. jobs bank," the letter says.
The union agreed to suspend the jobs bank on Dec. 3 without officially disbanding it as Chrysler, General Motors and Ford Motor Co. sought federal assistance to prevent a failure. Several U.S. senators singled out the program as an unacceptable benefit.
Jerry Dennison, president of Local 136 near St. Louis, confirmed receiving the letter.