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January 28th, 2009

UAW Ends Unprecedented Benefits



I’m sure there isn’t one person among us who would mind getting paid even when there’s no work to be done. Sounds like vacation right?

The United Auto Workers union has announced the end of their “jobs bank” for General Motors’ employees beginning February 2. GM paid 1,600 workers/UAW members even when there was no work to be done:

Until last month, employees in the program were paid 100 percent of their salary to report to a company location even if there was no work to do, [GM spokesperson Tony] Sapienza said. As of late December, GM workers who qualified for the jobs bank were told to stay home, and received 85 percent of their pay instead, he said.

The cost-cutting venture was laid out as a federal requirement when the automaker was approved for their $13.4 billion loan.

While we’re all proud of GM for following their new set of rules, does it come as any new sense of surprise that the American auto industry has floundered amid such wasteful spending obligations?

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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