AP Online via NewsEdge :
NEW ORLEANS_
Chrysler LLC has eliminated _ at least temporarily _ the controversial "jobs bank" program that gives union workers most of their pay and benefits while they are laid off, according to a union official.
The jobs bank will end on Monday, according to a letter sent to union members by United Auto Workers Vice President General Holiefield.
The contents of the letter were reported to The Associated Press by a local union official who had read it. The official spoke on condition of anonymity because the elimination of the jobs bank has not been made public.
The jobs bank was the object of much derision during congressional hearings last year over the Detroit Three automakers' request for government loans.
Workers will continue to be paid at least a portion of their wages while the company negotiates the controversial program with the United Auto Workers.
Elimination of the jobs bank is one of the terms of up to $7 billion in loans to Chrysler from the Treasury Department. The struggling Auburn Hills, Mich.-based automaker has received $4 billion from the government and is expecting to get another $3 billion.
Workers will continue to get medical, dental and life insurance benefits, but should apply for unemployment, the union official said.
Another person briefed on the plans said workers will continue to be paid supplemental pay to make up much of their wages after unemployment compensation. The person also spoke on condition of anonymity because the matter was under negotiation. So while the jobs bank technically has been eliminated, the supplemental pay will essentially take its place.
A message was left for UAW spokesman Roger Kerson.
Holiefield, who heads the union's Chrysler department, said in his letter that the jobs bank changes are temporary until negotiations with the company are finished, according to the union official.
Also, UAW President Ron Gettelfinger has said the union will go to President Barack Obama's administration to see if it can change the terms of the loans, which he has said have unfairly singled out workers for sacrifices.
Contents of Holiefield's letter were reported by the Detroit Free Press and Dow Jones news service.
Under the loan terms, Chrysler and General Motors Corp., which also received money, have to eliminate "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."
This provision also could ban supplemental pay.
GM spokesman Tony Sapienza would not state the status of the jobs bank at GM, but said the company is in discussions with the union about the jobs bank.
Ford Motor Co., which did not need government loans but is seeking a line of credit just in case sales continue to stay low into 2010, also has discussed the jobs bank with the union, but spokeswoman Marcey Evans also would not comment further.
Chrysler and GM must show the government plans to become viable by Feb. 17. If the Treasury Department isn't satisfied with the plans, the government could call in the $9.4 billion in loans to GM and $4 billion loaned to Chrysler.
Terms of the government loans set targets for the automakers to bring wages and benefits in line with Japanese automakers that have factories in the U.S.
Last year, GM and the UAW changed the terms of the jobs bank so laid-off workers get 85 percent of their pay and can stay at home while on layoff. Previously the workers got nearly all their pay but had to report to factories.
Gettelfinger said in December, while the automakers were seeking loans, that the union would suspend the jobs bank.
He said at the time that there were about 700 Chrysler workers, 1,400 Ford workers and 1,400 GM workers in jobs banks.
<<AP Online -- 01/26/09>>