Detroit Bailout: What it Means for Workers

The White House has a $17.4 billion plan for bailing out Detroit automakers. Here are some of the plan's conditions and "targets" on pay and perks:

• Firms must accept limits on executive compensation and eliminate perks such as corporate jets.
• Eliminate the jobs bank.
• Work rules that are competitive with transplant auto manufacturers by 12/31/09.
• Wages that are competitive with those of transplant auto manufacturers by 12/31/09.

It will be interesting to hear what UAW president Ron Gettelfinger has to say about the wage rule, given his recent statement that Toyota pays more than the Big Three.

Here's a bit more of what President Bush had to say (AP):

He said the companies' workers should agree to wage and work rules that are competitive with foreign automakers by the end of next year.

And he called for elimination of a "jobs bank" program — negotiated by the United Auto Workers and the companies — under which laid-off workers receive unemployment benefits and supplemental pay from their companies for 48 weeks. If they remain laid off beyond that, they move to a jobs bank in which the company provides about 95% of their pay and benefits. Until the most recent contract, people could remain in the jobs bank for years. Early this month, the UAW agreed to suspend the program.