United Auto Workers President Ron Gettelfinger has said that the controversial ‘Jobs Bank,’ which pays laid-off workers at Detroit’s Big Three auto makers near-full wages and benefits, should not be a major issue in this summer’s highly anticipated labor contract talks. He further said to press person that the recent UAW-approved attrition programs at General Motors Corp. and Ford Motor Co. has dramatically cut the number of workers in the auto makers’ Jobs Bank.
Auto makers have since long complaining that the Jobs Bank was a competitive disadvantage. In the meanwhile, some executives have said that the benefit would be addressed in labor talks, slated to conclude in September with the creation of a new, four-year contract. Gettelfinger coming under immense pressure decided to take a inflexible stance on the UAW’s need to protect the Jobs Bank, which has been in position for decades to guarantee remuneration and wage security for auto workers who otherwise would be damaged by the substantial downsizing taking place in the U.S. auto industry.
On the other hand, The UAW union has rejected wage concessions proposed by Delphi Corp. and a group of private equity firms, risking a $3.4 billion investment planned to pull the auto-parts maker out of bankruptcy. Vice President Cal Rapson, who is heading negotiations with Delphi, told reporters at the union’s bargaining convention in Detroit that the offer was ‘insulting.’ It was presented on March 21 by Delphi, General Motors Corp. and private equity groups that are interested in investing in Delphi.
There are strong chances that if the investors walk away, Delphi may ask a U.S. bankruptcy judge to cancel the UAW contract. The union threatens to strike if the contract is annulled, potentially cutting off parts to GM, Delphi’s biggest customer.
