Jobs Bank: Getting paid $30/hour to sit in a room all day and do nothing

[TrainTrac]

Getting Paid To Do Nothing



Auto Workers Go To Jobs Bank



By JEFFREY MCCRACKEN

Wall Street Journal



March 2 2006



FLINT, Mich. -- In his 34 years working for General Motors Corp., one of Jerry Mellon's toughest assignments came this January. He spent a week in what workers call the "rubber room."



The room is a windowless old storage shed for engine parts. It is filled with long tables, Mellon said, and has space for about 400 employees. They must arrive at 6 a.m. each day and stay until 2:30 p.m., with 45 minutes off for lunch. A supervisor roams the aisles, signing people out when they want to use the bathroom.



Their job: to do nothing.



This is the Jobs Bank, a two-decade-old program under which nearly 15,000 auto workers continue to get paid after their companies stop needing them. To earn wages and benefits that often top $100,000 a year, the workers must perform some company-approved activity. Many do volunteer jobs or go back to school. The rest must clock time in the rubber room, or something like it.



It is called the rubber room, Mellon said, because "a few days in there makes you go crazy."



The Jobs Bank at GM and other U.S. auto companies, including Ford Motor Co., is likely to cost about $1.4 billion to $2 billion this year. The programs, which are up for renewal next year when union contracts expire, have become a symbol of why Detroit struggles even as Japanese automakers with big U.S. operations prosper.



Although GM often blames "legacy costs," such as retiree health care and pensions, for its troubles, its Job Bank shows the company has inflicted some wounds on itself. Documents show that GM helped to originate the Jobs Bank idea in 1984 and agreed to expand it in 1990, seeing it as a stopgap until times got better and workers could go back to the factories.



"The bank was designed for a different time, a time when we were growing," said Pete Pestillo, a former Ford executive who oversaw union talks. The Jobs Bank has failed to stop the outflow of jobs at Detroit's union automakers. Since 1990, GM's union payroll, including former subsidiary Delphi Corp., has fallen to about 137,000 from 358,000. Many have retired, died or found other jobs. The rest are in the Jobs Bank.



Mellon, a 55-year-old father of two, was born in Flint. He joined GM in 1972, following his grandfather and his father, a plant foreman who spent 37 years at GM. Through the 1980s and 1990s, Mellon held jobs designing electronic systems for vehicle prototypes. In 2000, GM merged two engineering divisions, and he wasn't needed anymore.



Since then, except for a period in 2001 when he worked on a military truck project, GM has paid him his full salary for not working. That is currently $31 an hour, or about $64,500 a year, plus health care and other benefits.



About 7,500 GM workers are now in the Jobs Bank, more than double the figure a year ago. The bank added 2,100 workers last month when the company closed a truck-assembly plant in Oklahoma City. Each person costs GM about $100,000 to $130,000 in wages and benefits, according to internal union and company figures, which means GM's total cost this year is likely to be about $750 million to $900 million.



One way that employees in the Jobs Bank can fulfill their requirements is to attend eight- or 12-week classes that GM offers. In these classes, Mellon has studied crossword puzzles, watched Civil War movies and learned about "manmade marvels like the Brooklyn Bridge," he said. One class taught him how to play Trivial Pursuit.



More recently, he attended an institute in Flint called the Royal Flush Academy. It is designed for those seeking work in casinos - the Detroit area has several - and teaches students to deal blackjack and poker. Mellon said he is not interested in casino work and left the academy after they docked his pay because he was 1

 

[Nelson Atwell]

Sounds much like Purgatory to me. I'd definitely do the volunteer work, or just be a man and get a new job.

 

[Michael Cacioppo]

So ya wanna know why we can't compete?

 

[Tom Schindler]

So ya wanna know why we can't compete?

Because the average CEO makes 431 times the average worker. The money gets paid to a man, or woman, that does nothing instead of the money reinvested into new designs.





Tom

 

[Nelson Atwell]

Agreed, but then the 15,000 Job Bank folks must make over 3 times collectively than the CEO, so there.



By the way, the President of the United States makes $400,000/year. I'm not sure I'd do that job for $400K.

 

[Tom Schindler]

Give the people what they want and you wouldn't need a job bank. Investing the money when you should have would have elimintated the need for a job bank.



I agree, you could not pay me enough to be president. It is a good thing because I would ruin alot of peoples lives if I were president.





Tom

 

[Josh Langel]

Caymen would force everyone into a Ford



(I'm just playin')

 

[Michael Cacioppo]

Caymen, I didn't hit on unions. I said that the labor burden is high with 7.5 million just thrown out the window with no return. I am not taking issues with unions or management. I'm just stating a fact. Sorry if I got your dander up.



If The CEO would cut his salary by 50% would you agree to dump 50% of the personel bank?

 

[Tom Schindler]

I would require those businesses that offer pension plans would have to fund them 100% and I would eliminate all political contributions.





Tom

 

[Jim Thompson]

Gosh Tom, if you insist on that, you're not going to get elected anyhow....so you have nothing to worry about. And by-the-way, where did this come from: "Because the average CEO makes 431 times the average worker"? Is that a quote or did you just figure it out yourself ? Oh, and I agree, pension plans should be fully funded, certainly, but tell me what you would suggest on this one: "Give the people what they want and you wouldn't need a job bank." I'm not sure I follow on that point.

 

[Cory Richards]

That's nuts, the only thing I could think of to do is not sleep at all until I got to the room.



The president probably only makes $400,000 in wages but add in all the other perks and he takes in a whole lot more than that.

 

[Tom Schindler]

"Give the people what they want and you wouldn't need a job bank."

What I mean about that is if the US automakers did not put all thier eggs in one basket by not offering cars that buyers want and investing all resources into large SUV's, they would not be in the situation the industry is in.

"Because the average CEO makes 431 times the average worker" Is that a quote or did you just figure it out yourself ?

http://www.atsnn.com/story/167664.html

http://money.cnn.com/2005/08/26/news/economy/ceo_pay/

http://www.townhall.com/opinion/columns/alanreynolds/2005/12/15/179165.html

http://www.faireconomy.org/press/2005/EE2005_pr.html

http://www.inthesetimes.com/site/main/discuss/2413/



I can get you more links, if interested.





Tom

 

[Michael Cacioppo]

Caymen, with all due respect, I think you have many good points about the excesses of management, but I think your shop steward has you totally brainwashed. There have been several CEO's and top Exececs that have made a significant contribution to their companies and are worth their salaries, but not all. Iaccoca brought Chrysler from near bankruptcy to a profitable enterprise. Lutz has done tremendous things. Don't sit there and say Execs do nothing.



If all these "bank" union members could change the direction of Ford, why don't they come up with new designs, or are they manual labor that can assemble, but not design. Yes, that statement was meant to be sarcastic. What does the non-union white collar workers get for compensation? I'm not talking about the top execs, but the designers, engineers, etc. If it weren't for some of these people their would be no industry for the union workers to work in. I'm sorry for my response so I will apologize ahead of time, but some of this "unions are the greatest thing since sliced bread" is pure BS.



As I said I do apologize for this response, but squeezing a golden goose works for a while and then the Sh@t comes out when its empty.

 

[Tom Schindler]

I already had those feelings long before I became union.



The engineers are more responsible for the situation of the US Auto industry then anyone else. They are the ones that look for ways to trim the fat to make the vehicle more profitable or design ugly cars.



The actual labor part of the industry is the back bone of the company. The best workers in the world can not make a Rolls Royce out of a Yugo, but if the vehicle is designed as a Rolls Royce, even Yugo builders will end up building a Rolls Royce.



Why should the assembly workers get the shaft for the mistakes of White Collar Workers that don't get thier hands dirty, loose fingers, and work under extreme heat and cold?





Tom

Tom

 

[Michael Cacioppo]

Caymen, design engineers are not the ones that trim the fat. It is the accountants. The Engineer is given a specification to meet in his design. That is form, fit and function. He will make the design meet those goals at the lowest possible cost which includes the labor to make or assemble the part.



If the white collar workers are treated so well, why didn't you become one? To get a Masters in say Mechanical engineering it will take about 6 years and about $150-180K for colleged. In addition there is a lost income of 6 years that could have earned him $25K-35K a year. That brings the total cost up to $280-$390K. Factor these numbers in when you yell about them being over paid.



On the congtrary many white collars workers do get their hands dirty. I had been in the Aerospace industry for over 40 years. Many engineers worked around dangerous equipment, power lasers, cryogenic liquid N2 , Vacuum chambers, etc. So don't feel that only the blue collar guys get the dangerous jobs.





Let me get something clear here. I respect blue collar workers that are good at the trade. There are great plumbers, carpenters, electricians, electronic tech, machinists, etc. etc. etc.



I think you only see the world through your "union" glasses. How much time and money does a windshield installer have to sacrifice to get his position? What are his intellectual requirements? What does he get paid? When does the Engineer actually make more total money than the windshield installer? How long would it take for the mechanical engineer to learn to put in windshields?



Caymen, again I am not attacking you as an individual, just the union party line. These are my opinions with all do respect to you.

 

[Tom Schindler]

If the white collar workers are treated so well, why didn't you become one?

I had the chance, I turned it down.



I know you are not atacking me and I am not wearing union glasses. I have worked both union and non-union. I prefer union work. I get treated fairly, I am respected for what I do, and I don't have to play games to get treated fairly.



You are right, bean counters do cut costs whenever possible, but the engineer signs off the job.





Tom

 

[Michael Cacioppo]

Caymen, if the design meets the requirements then why would they not sign it off? If the rquirement was to make a intake manifold of a certain dimension that would last 8 years without failure It would probably made of cast iron (lasts indefinitely). If an additional requirement was to have it weigh no more than 15 pounds then aluminum might be the choice of material (more expensive than cast iron, but lighter). If in addition the cost of material was to be at $5.00 per unit, the plastic would be used which meets requirements one, two and three. Is plastic the best choice for reliabilty? No, but the requirement was for it to last a minimum of only 8 years.



The Engineer can now sign off on the design since it met all requirements. Is it the best design for durability, no. That is not the Engineers fault, it is the requirements that were handed down to him, some from the bean counters and some from the government.

 

[Tom Schindler]

An engineer is the one that decides how long it is suposed to last. I do agree though. Bean counters care about profit and profit alone.





Tom

 

[Michael Cacioppo]

Cayman,

An engineer is the one that decides how long it is suposed to last.

is incorrect. Believe me. He is given the requirements, INCLUDING minimum life expectancy.

 

[Tom Schindler]

I guess that came out wrong. I know an engineer calculates the margin of safety with the vehicle weight, road conditions, possible corrosion, etc. With that taken into consideration, the engineer decides what size to make a component.



Just for the record, I am no dummy when it comes to technical things. Being in NDT for 11 years, I have seen some really dumb designs. My favorite is a guy asking me if the crack I found will hold up till the next shutdown because they can not afford to shut the machine down till then. My answer?



"I don't know, I am not an engineer."



His comment? "Well I am and I don't know."



My comment back?



"Looks like you are overpaid!"



I know exactly what you are saying. Fortunatly, the stuff I deal with, there is no margin of safety too large. Too many lives are at stake to cut even the slightest corner.





Tom