Tuesday, September 25, 2007

GM Anti-Jobs Bank: Nice Nonwork If You Can Get It

One issue contributing to the UAW's strike against GM is that negotiations reached an impasse regarding the future of the "jobs bank," or what the Wall Street Journal calls "GM's Anti-Jobs Bank, the company's euphemism for a post-employment limbo in which GM pays laid off members of the United Auto Workers not to work." As the WSJ points out today, it's "Nice nonwork, if you can get it."

There probably isn't a single issue that better highlights the problems facing GM and the UAW than the "Jobs Bank," which they both agreed to in 1984. Here is what the WSJ had to say about it in a 2005 editorial "GM's Anti-Jobs Bank":

If you want to know why GM's costs are too high for the number of cars it sells, here's one explanation - the Jobs Bank.

GM doesn't like to talk about the "jobs bank," to the point that it won't disclose how many idled workers are in the bank or even how much it costs the company. However, the Detroit Free Press has dug around and reported that the "bank" holds some 5,000-6,000 employees, at an annual cost of as much as $800 million a year. And that's just the beginning of the damage it does.

The jobs bank was created in 1984 at a time when it became fashionable to worry that automation would cause robots to replace workers on factory floors. So in exchange for the right to introduce productivity improvements in factories, GM, Ford and Chrysler all consented to jobs banks. The idea was that in exchange for educating themselves, doing community service or in some cases just sitting around a factory, workers would continue to collect pay and benefits until the automaker could find another job for them.

One trouble is that U.S. car makers have been shrinking more than growing in the two decades since, meaning people have stayed in the bank longer than envisioned. The commitment to find a new job for those workers only made sense in an environment in which GM's demand for labor was stable or growing. Instead, that demand has been steadily shrinking as productivity has increased and market share has decreased.

The jobs bank sends a message that downsizing is temporary, and that GM can accommodate those workers somewhere. The reality is that many of them are simply waiting out retirement.

GM has a host of problems, from the attractiveness of its product lines to the health-care costs it pays for its one million retirees. But a major one is size: It is a smaller company than it was or expected to be when it made the promises it's now trying to keep both to retirees and current workers. GM has some of the most productive industrial workers in the world, but it has too many of them for the number of cars it can sell today.

The jobs bank is both cause and symptom of that problem. We don't wish hardship on those workers, but the company's future now rests on its ability to make its payroll match its production. If the jobs bank -- and the self-deception it represents -- cannot be fixed, that millstone will continue to drag down what was once one of America's great companies.

MP: Only when and if GM and the UAW agree to eliminate the "jobs bank," will there be any hope that either will survive.

15 Comments:

At 9/25/2007 10:31 AM, Anonymous Barry Thornton said...

In 2006, GM and its affiliates produced approximately 9.2 million vehicles. In 2005, the "jobs bank" cost GM approximately $800,000,000 (according to the Wall Street Journal). This works out to approximately $87 per vehicle.

Toyota is famous for lean production. Maybe we can develop a phrase for GM's approach to producing vehicles - bloated production.

 
At 9/25/2007 10:58 AM, Blogger Walt G. said...

The Jobs Bank was set up to fail by GM. If you look at the actual contract language it states roughly: employees in the Jobs Bank will perform useful work as determined by GM. Workers do not simply choose to sit around all day. And, the UAW cannot decide the job assignments because that is a mandatory management issue.

To meet GM world class benchmarks, every employee is supposed to receive 80 hours of training per year. However, at our location, we can’t get employees released from the line for training because there are no replacements. For the last five years our average training per employee is less than 8 hours per year. GM can utilize Jobs Bank employees without future commitment or penalty.

Why would GM decide to let employees sit around instead of providing them as training replacements as envisioned by the UAW when the program started?

In its current form, the Jobs Bank should be eliminated. However, to obtain necessary training, additional workers should be hired as training replacements. Companies that want to be world class can’t pick and choose the methods to obtain that status and then blame the hourly workforce when it does not happen.

If you are curious, Toyota set the 16-hour-training benchmark: Where did they get the employees to release their line workers with their lean production methods? It doesn't happen with magic.

 
At 9/25/2007 2:49 PM, Blogger The H.C. said...

G.M. has been dying a slow death as long as I've been living and working in Flint, Michigan. I've always viewed the UAW and GM as two enities caught in a death struggle, each stabbing the other repeatedly in the back but afraid to let go in fear of being the one killed first. GM made some very bad contracts with the union back when it's place was stronger,
but it's hard to blame the union for only doing what it was supposed to do, get the best deal for it's members. If the situation were reversed would GM let the union back out of it's bad deals? I think not. It's really a bad state of affairs and I can see no good solution. The union is a drowning man climbing on to the back of it's only hope..if even just to breath for a few more minutes.

 
At 9/25/2007 9:00 PM, Blogger holeydonut said...

I remember seeing a statistic that the average Detroit-based UAW staffed final-assembly plant needs to staff around 120% of its expected workforce to cover absenteeism. I believe the study was done by the Automotive Supplier Action Committee. During summer months this rate would shoot up - to the point that some plants miss their build target due to excessive absenteeism on some days.

The same study estimated something like this absenteeism costs the automaker something close to $2B annually. The effect of missed production, overtime pay, inefficient plant utilization, all add up to this extreme cost.

So the question to ask is - why does the UAW fight to allow the lazy and apathetic workers to persist? Why is it that those good workers who feel compelled to prove that they are good people must be branded as "lazy" due to their truly lazy coworkers?

The Jobs Bank has nothing on the bigger issue. The UAW and it's ridiculous expectations condone and even promote the ineffectiveness of its members.

The article states: "GM has some of the most productive industrial workers in the world." Here's a News Flash... Toyota, Honda, Boeing, Sunbeam, Nakamichi, LG, and Maytag also have some of the most productive industrial workers in the world. The big difference is that GM also has some of the most lazy, useless, do-nothings... and GM can do nothing to reward the good employees while ridding itself of the bad. And yes, employees are commodities... to expect any different is good ethos but not good economics or business.

 
At 9/26/2007 1:40 PM, Blogger Walt G. said...

Holeydonut: you have no facts to back up any of your claims.

As a UAW/GM worker, I’ve found over the years, that most people who spout such venomous and unsupported drivel are insanely envious people who would jump at the chance to work for GM.

 
At 9/26/2007 6:05 PM, Blogger holeydonut said...

Walt G - check out this link:

http://www.workerscompinsider.com/archives/000148.html

Also, I am very familiar with how horrible it is attempting to staff UAW assembly plants. It is laughable and disgraceful. Being a member of the UAW breeds contempt for management; and management has contempt for the workers. How this is a healthy relationship is beyond me.

Go hunt down a friendly line supervisor and ask him how much absenteeism there and you'll hear something close to 20%. I don't need any other proof to back up my claim because I know first hand how bad UAW staffed plants are.

I wouldn't touch an offer to work for GM with a ten foot pole.

 
At 9/26/2007 7:56 PM, Anonymous Victor said...

I would be happy to work at GM. I have also been in a couple of stamping plants that made me wonder how the company works. I watched a fork lift driver load a AA press destacker with steel. When he finished his 2 minute job, he sat down in a chair by a building column and waited 45 minutes for the next run of steel. As I was working with the destacker at the time, I got to watch this individual do, at most, 25 minutes of work for the full day.

I know that this is not what every GM worker is like. In all the times that I have been to the stamping plants, I have never seen an employee "go the extra mile". Maybe, it is contempt toward me for being a contractor brought in to oversee service of the equipment we installed.

I would jump at the opportunity to work at GM. I hope that my work ethics would not completely disappear just because I can not be fired.

It only takes one bad apple to throw the whole bag away!

 
At 9/26/2007 9:10 PM, Blogger holeydonut said...

Victor - I totally agree with you. There are lots of motivated people at the UAW facilities. I also know of many younger people at the plants who - like you - entered the plant cherishing their opportunity to do good work for a good company.

Unfortunately, the rank-and-file beat the motivation out of people rather quickly. I know of an individual who was threatened with violence if he didn't slow down at a plant. I know line supervisors that have threats of getting "cut" if they didn't lighten up. I've seen first hand examples of UAW workers slashing the tires of an intern's foreign-made vehicle. I've seen examples where one worker reports theft of tools only to see the UAW re-instate the thieving worker. The "narc" subsequently got pressured out of his job by his anger co-workers.

Motivation is the enemy of some UAW members. But the premise of the rank-and-file is to protect everyone; regardless of their motivations.

Walt.G was quick to jump on my disparaging comments towards the bad ones. This is the exact result of the years of UAW blurred vision. They do not consider that there is such a thing as a lazy worker or one that fails to show up to work. Most UAW supporters believe there is no problem with absenteeism or "presentee-ism" (where people show up but do no work). It's almost as if a sleeping worker who is supposed to be doing actual work turns invisible when he closes his eyes to sleep in the plant.

Really, I do not want to say that every UAW member sucks. What I a stating is that there are many bad people that should not be accommodated, and the hard working employees should be able to take praise and rewards for their efforts. But the UAW does not allow the disparate treatment of workers. You cannot reward good people or dish out punishment to the bad.

In the end, the bad ones get the attention and the bad ones remain the poster-children of why US Automakers have inefficient operations in their plants. From the outside looking in it's impossible to identify how many good workers there are.

My analogy for this is different than your apples. Let's say someone tells you that some food made by Restaurant A is made by employees who do not wash their hands. This message is re-iterated in the press; and when you visit the restaurant you see that a few people out of staff of 100 do their business in the restroom and walk out without washing. Would you ever want to buy Brand A food?

Even if it turns out the alternative restaurant of equal food type - Brand X - is made by the same types of workers (ones that don't wash their hands). However, you always see them wash their hands. There is nothing in the papers about how dirty Brand X is. Why would any rational customer want to buy Brand A?

The UAW is holding the stubborn notion that people remain in this country who empathize with them. They think that there are no bad apples in their crew and they are all great workers. To accept anything less than this notion would admit that there is a problem in the rank-and-file. The funny thing is that customers clearly do not respect the UAW; and since their money is what drives the business their stubbornness and arrogance in the face of criticism means they have no motive to change.

 
At 9/27/2007 7:52 AM, Blogger Walt G. said...

I don’t know about other GM/UAW locations, but we’ve met our strategic stretch target goals for non-contractual absences for both this year and next year. In fact, our performance measurables are green in 19 of the 20 areas we track. It’s perfectly normal for lean companies to operate with 15 to 20% extra people for vacation, sick leave/maternity leave, military leave, public office leave, educational leave training, team meetings, and other legitimate personal and business purposes.

Once performance gaps are analyzed between desired and current business states, our uncontrolled absences (where people just do not show up to work), which at our location hovers around 4%, are regulated through a detailed and progressive process holding employees accountable for their actions. If employees who do not come to work are not disciplined, supervisors are not performing their job properly. Employees who refuse to come to work end up being discharged, union or no union, if they refuse offers of personal help and continually refuse to come to work. It happens almost every day.

You can imply whatever you want, but neither you, nor the article you mentioned, supplies data or evidence, other than anecdotal, to support your claims. What’s the controlled and uncontrolled absence rate where you work? What’s your industry world-class standard? Do you even know? If it’s not measured, it can’t be controlled. We know our absence rate inside and out, and we jointly and constantly strive to improve our performance metrics to meet our goals.

 
At 9/27/2007 8:58 AM, Anonymous Victor said...

Walt G.

I know that performance goals are met. I know that standards are maintained. I know that scheduling accounts for absences. I also know that if a machine breaks down, it can take 4 hours for an electrician to arrive at the site to turn a screwdriver to make an adjustment in a prox switch. I know that it can take another 4 hours to get a pipe-fitter to adjust a pressure regulator. The machine goes down, everybody sits down and waits. There is no sense of urgency. Are the people in danger of not making their goals?? Not a chance. The goals are set low so that they will be met.

Walt, if you can't look around the plant that you are in and see 20 ways improve efficiency and productivity, then you must be in a much different world from the three stamping plants that I been in for months. Pontiac stamping, Doraville, Ga, and Shreveport, La stamping have exactly the same work ethics and standards. They have exactly the same wait times for service. I do not see pride in a job well done. I do not know which plant you are employed in, but I have no respect for the people without ambition for their work.

As I said before, I would love a job at GM. I hope that the people around me would come up to my standards; not me fall to theirs.

 
At 9/27/2007 9:41 AM, Blogger Walt G. said...

Victor:

I'm a pipefitter, and it does not take me 4 hours to adjust a regulator after I've been notified that’s the next priority. We no longer have people sitting and waiting for something to break down, so we respond to the highest priority jobs first (management decides the priority by process design). It's kind of like a hospital emergency room nowadays.

You're right; we can and must get better. Everything we do is counted and documented, so we know what our gaps are. Our Business Plan Deployment boards in each department track all the relevant processes from a Current to a Desired State. Accordingly, all shortfalls are either from not meeting our goals, setting the bar too low, or not recognizing a business importance. All weekly unmet goals require a written action plan or a problem resolution plan with definite timelines for correction. Each Business Unit Manager, with help from joint teams, meets daily to work on the plans.

We are always open to ideas to improve our processes, but keep in mind those added resources, people or otherwise, often increase costs. Once the costs are too high, we can’t competitively produce the part.

 
At 9/27/2007 6:23 PM, Blogger holeydonut said...

Walt - You know as well as I do that absenteeism is simply workers who are not present on their scheduled. Someone fighting on the lines in Iraq is not absent from work.

And - yes - the absenteeism on some days at the plants that I had the unfortunate experience of working with did have absenteeism well in the teens. There were missed builds. But no - there were no discharges.

My anecdotal experience is the same as yours - you claim the UAW does everything possible to run efficiently, but my experience proves otherwise. Internal UAW studies show absenteeism (of the unexpected kind) is at 4% - and I know firsthand that it often peaks past 20% on certain days when the weather is nice.

Honestly, if I can count more than 1 skilled trades person sleeping while on the job then in my mind that is too many. I don't need to be any more anecdotal than that in order to form my opinion that the UAW needs to actually step up and take care of business instead of using odd statistics to rationalize themselves.

If there was a concrete and definite way to communicate who is "right" then I seriously doubt there would be much bickering at all in Detroit. In fact, I'm sure we'd probably all be celebrating at how great American Autos were if we could sort out some magical solution that actually makes sense and is agreed upon by the UAW and the Detroit Automakers.

What I find funny is that employees going through chronic absenteeism are let go; and then subsequently re-instated by the UAW. Same goes with workers who threaten line supervisors and workers who steal.

I grew up in a town with a Ford plant - and there were lots of good people there. I have no doubt in my mind that these same people would be capable and hard workers regardless if they were in a UAW or not. It was these same people that would talk about the problems at the plant and how there were man lazy people. So I asked - why is it that they get away with being lazy? They have no answer.

Now I know why they get away with being lazy - either on the job or on days they feel like skipping out of work.

 
At 9/27/2007 6:31 PM, Blogger holeydonut said...

One of GM's original bargaining points was to create a situation where a worker could be trained (and expected to perform) more than one job. I think this was some vague attempt to improve efficiency and reduce costs.

Guess which extremely obvious and process improvement will not be in the final ratified GM contract?

It's great to be open to ideas and talk about plans for improvement; but actually implementing the ideas is another matter.

And since semantics is of ultimate importance in these discussions - I I mean really implementing and doing something valuable. Not some weird way of spinning the fact that someone is doing a portion of their normal job and claiming credit.

Of course, this criticism goes both ways. Management is an even worse offender in terms of saying one thing but then doing another. Hence why the Detroit Automakers deserve what they get... which is going to be a slow decline into oblivion as they hang onto old ideals.

 
At 11/19/2008 5:56 PM, Anonymous Anonymous said...

Im in the I.A.M. I know how a company can take advantage of worker's rights without a union.However the uaw have to do something to try and save the company that hey "love" Members of congress don't seem to want to bail them out.Oh well read it and weep.

 
At 11/19/2008 6:02 PM, Blogger Raymond said...

GREED GREED GREED GREED GREED.This is what happens when both parties suffer for the same poision. The big three should file for bankruptcy.Hopefully they can restructure themselves into a more lean compannies.












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