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Past deals come back to haunt UAW

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Lisa Napoli: Today’s the day we learn how Delphi auto workers voted on the latest UAW contract — 17,000 members were able to vote on the pact that would shut six plants and slash pay and benefits.

A “yes” to the plan is seen as essential to the future of Delphi as it tries to emerge from bankruptcy. Marketplace’s Alisa Roth takes a look back at earlier contracts that helped the industry into the spot it’s in today.

Alisa Roth: Twenty years after the fact, it’s hard to believe what the United Auto Workers negotiated back in the 1980s: In exchange for allowing more automation of the Big Three plants, the union made the car companies create the Jobs Bank. It’s a program that essentially pays workers not to work.

Here’s the deal: you’re an autoworker. Your plant is producing too many cars. But the company doesn’t lay you off. Instead, it sends you to the Jobs Bank. Depending where you live and work, you might do community service — mowing lawns for the elderly or helping out in a local school. Or you might sit around watching movies and doing crosswords all day. Either way, you still draw almost your whole salary. Including benefits.

But there’s plenty of speculation the Jobs Bank will disappear soon. The UAW and the Big Three sit down at the bargaining table in a few weeks. And everyone’s guessing the union will have to make more than a few concessions.

The jobs bank has become sort of an icon or metaphor for much of what, I suppose, is seen as wrong with the industry. David Gregory studies labor and employment law as a professor at St. Johns Law School:

David Gregory: It’s seen as counter to the principles of democratic capitalism.

Nobody’s said the Jobs Bank will be on the agenda when the Big Three and the UAW meet. And there’s no telling whether workers would be willing to give up the Jobs Bank.

Bob Schulz follows the auto industry at Standard and Poor’s. He says it could be politically difficult to eliminate the Jobs Bank — but anything could happen in the negotiations.

Bob Schulz: We think there’s enough liquidity that the automakers can deal with some of these challenges and that the UAW is realistic enough to work with them.

All of the Big Three are trying to downsize, by closing plants and buying out workers. If those plans succeed, they won’t need the Jobs Bank.

With the head count reductions that Ford, GM and Chrysler are undertaking, there’ll be a lot fewer people — and presumably fewer people in the Jobs Bank to begin with. The UAW and the Big Three head to the bargaining table July 23.

In New York, I’m Alisa Roth for Marketplace.

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