GM to end controversial 'jobs bank' Monday

DETROIT -- Chrysler ended a similar program earlier this week.

The moves come as GM and Chrysler are racing to get concessions from labor and other stakeholders as required under the terms of a $17.4 billion federal rescue of the two companies.

The 1,600 United Auto Worker members in GM's "jobs bank" will be laid off and must apply for unemployment. Between a mixture of unemployment compensation and company pay, they will then receive about 72% of their normal compensation, GM spokesman Tony Sapienza said.

Chrysler's UAW workers who were forced out of their jobs bank also are receiving a similar mixture of company and unemployment benefits.

The federal loans to GM and Chrysler called for the "elimination of the payment of any compensation or benefits to U.S. employees of the company or any subsidiary who have been fired, laid-off, furloughed, or idled, other than customary severance pay."

GM indicated that with the elimination of its jobs bank, it believes the company is meeting that requirement. However, the automaker noted that talks with the UAW are still underway.

"This allows us to put a portion of our unemployment costs to the states, as most companies traditionally do," Sapienza said. "The terms of the loan agreement say that our severance policy has to be in line with what is customary. We believe this is in line with customary severance and layoff policy. ... We are continuing to work with our union partners to discuss other elements of the bridge loan and the things we still need to do."