Wanna See Something Totally @#$%-ed Up?

by Joe Pulcinella

From Forbes:

Scott Taylor spent this summer fixing up neighborhood parks in Edgemere, Md., a pleasant suburb in Baltimore County that juts into Chesapeake Bay. He trucked sand into the waterfront Lynch Point Park to rebuild the beach, power-washed the play set, fixed the fences and helped a Boy Scout troop paint a flagpole. For this and other community service work Taylor earned $31 an hour along with fully paid health insurance and credit toward raises and his pension. Who's paying him? General Motors, the carmaker that has lost $1.3 billion so far this year.

Taylor, 49, is an autoworker, but GM no longer has a job for him. The Baltimore factory where he worked for the past 21 years closed in May. Instead of sending Taylor packing with a nice severance package, GM put him in what's known as the "jobs bank." Under a contract it first negotiated with the United Auto Workers in 1984, GM is obliged to pay workers who lose their jobs full wages and benefits, even though they are not building vehicles.

[...]

Still others go to a room in an industrial park or shopping mall near their closed factory, in Baltimore; Linden, N.J.; Lansing, Mich. and elsewhere, and pass the time playing cards, watching movies and doing occasional paperwork. Some transfer to other GM factories when jobs open up. Others stay in the jobs bank until retirement.

Where does all this lead?  GM Seen With 30% Chance Of Bankruptcy Filing

Comments

This is an extension of the heinous cost-shifting represented by unemployment "insurance" - the unions fully exploit this because the laws are written to prohibit requiring a unionized worker to take a job other than an equally unionized and overpaid one to the one they were laid off from. Most of the cost of this "insurance" is paid by people who cannot afford it and benefit little from it.

This is going to get worse. GM has a 30% (too low in my opinion) chance of bankruptcy given the way things are NOW. But GM's sales are in free- fall, particularly in the segments (SUV's, Full-Size Trucks) where they have bet the heaviest and made the most money. GMAC, their mortgage and finance arm, will, if the housing bust coincides with a general economic downturn, implode spectacularly, taking the whole company and large swaths of the rest of the industry with it. GM still has a significant stake in Delphi, which is already bankrupt, so it is already happening.

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