Ailing Auto Industry Pays Workers for Not Working

March 25, 2006 — -- Despite their unprecedented efforts to cut costs, American automakers are paying thousands of union workers to do nothing.

"They clock in, they sit there and they do their thing," said Daniel Howes, a business columnist for the Detroit News. "They read a book, play a game, watch soap operas or do whatever they do."

And then?

"They clock out and leave," Howes said.

It's called the jobs bank. It was invented 20 years ago, when the industry was expanding as a way to hold onto skilled workers until a new job opens up. But these days there are no new jobs.

"Most of us enjoy building cars, being productive, and there's just nowhere to go," said Linda Swan, a Ford employee.

In Michigan, General Motors reportedly is getting ready to cut hundreds of white collar workers from its ranks as early as next Tuesday. This week, the automaker announced it would offer more than 100,000 early retirement packages to hourly employees as part of a major restructuring plan.

But, that plan's impact on the jobs bank remains unclear.

There are an estimated 15,000 workers in the jobs bank -- and that number has been growing with plant closings and layoffs at GM, Ford and auto parts maker, Delphi.

For every worker in the jobs bank, automakers spend up to $130,000 a year on wages, benefits and pensions -- a total of nearly $2 billion this year alone.