The United Auto Workers union will end its so-called jobs bank for General Motors Corp. employees on Feb. 2, one of the conditions set by the government when it agreed to lend the biggest U.S. automaker $13.4 billion, Bloomberg reported.
GM has 1,600 workers in the program, which pays UAW members even when they have no work to do, company spokesman Tony Sapienza said today in an interview. Those leaving the jobs bank will get state unemployment benefits and some GM pay, he said.
The union's move puts Detroit-based GM a step closer to meeting a Feb. 17 deadline to show progress on a survival plan so it can keep the federal loans. The automaker still is negotiating pay and benefit reductions with the UAW as part of the government rescue plan.
"It is a big savings if there are a lot of people in the jobs bank," said Sean McAlinden, labor economist at the Center for Automotive Research in Ann Arbor, Michigan. "If the union can get away with it, they won't cut any wages or benefits."
Last week, the UAW set Jan. 26 as the date to halt the jobs bank at Chrysler LLC, which got $4 billion in aid. Besides finding labor savings, GM and Chrysler also must trim debt and take steps such as shutting factories and dropping models.