Job Security Programs Prove Costly for Atuomakers

By Towle, Michael D. | THE JOURNAL RECORD, November 14, 1991 | Go to article overview
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Job Security Programs Prove Costly for Atuomakers


No one has to tell Bob Harlow about bad times in the auto industry.

The president of United Auto Workers Local 1776 at General Motors'

plant in Willow Run, Mich., can remember the recession of the early 1980s when the out-of-work and out-of-money autoworker was a symbol for those tough times.

Harlow _ a UAW member since 1965 _ and the 3,600 members of his union local are witnessing more of the same auto industry troubles in 1991.

After months of running the Willow Run plant on one shift, alternating biweekly between day and night crews, GM in March laid off the entire second shift _ 1,124 workers.

But unlike 1981-82, no cry for help is heard from workers as unemployment compensation and company benefits wane.

A year ago, the UAW and GM negotiated a three-year agreement that guarantees workers' incomes after 36 weeks of being laid off _ a provision that has already come to the aid of about 1,000 workers at Willow Run.

Rather than wondering where their next paycheck will come from, those 1,000 workers are either working in a GM Job Opportunity Bank Security program or have taken a voluntary layoff and are receiving 85 percent of their take- home pay for staying at home.

"It would have been a damn mess around here," Harlow said. "We would have over half our plant on layoff and they would have exhausted their unemployment benefits and the SUB fund (a GM-paid Supplemental Unemployment Benefit) would have been almost gone."

The new contract provision _ hailed as a milestone for the UAW _ has done for thousands of GM, Ford and Chrysler workers nationwide what it has done for those in Willow Run.

The Big Three automakers had thought last September and October when they were agreeing to contracts that the industry was on an upswing _ on its way to a recovery that would be led by a bevy of beautiful new cars.

But the turnaround has been slow in coming and the automakers find themselves bleeding red ink once again, while laying off thousands of workers and closing plants across the nation.

The Big Three have run up $5 billion in losses in the first nine months of the year and are expected to make 1991 their worst year since 1980, when they combined to lose $4.5 billion.

The Chevrolet Caprice _ which was to figure even more prominently in Willow Run's future than it was at GM's plant in Arlington, Texas _ has been slow to sell and has strong competition in the new Crown Victoria from Ford.

The Willow Run plant also builds three GM station wagons, but those have proved less popular than the Caprice, which has done well with police and other fleet buyers but has not caught on with the general public.

GM most recently announced that it would close plants in Van Nuys, Calif., and Scarborough, Ontario, putting almost 6,000 out of work, although their income remains protected after 36 weeks of layoff under the GM-UAW agreement.

"It's been a tough year," said UAW President Owen Bieber. "The economy has been down in general and, of course, the cumulative effects of the aggressive trade practices of the Japanese keep getting worse and worse.

"That said, I'm happy about how the job security provisions of our 1990 Big Three agreements are working out. They're doing exactly what they were designed to do as far as providing stability to our members and their families and support for the economy of the communities in which we work.

"In fact, given what's happened, I shudder to think how much worse the situation might be without these agreements in place."

John Maciarz, the spokesman for GM's labor relations staff, said that when the company signed the agreement last year it committed $3.35 billion to income security for GM workers.

Today about one-third of the fund has been emptied, and Wall Street auto analysts are saying the agreement has proved a costly one for GM.

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Job Security Programs Prove Costly for Atuomakers


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