No wonder GM is in trouble

General Motors, as we all know, is in desperate straits at the moment, but I didn't realize just how complicated their situation is. Here's an example, courtesy of Autoblog:

The so-called "jobs bank" that's mandated by the UAW, where workers go to get paid for years after being laid off, is a concept that many of us cannot comprehend. Why? Not because we wish to be cruel to union employees, but rather because it was designed with the idea in mind that an automaker's layoffs might be temporary and that workers would need to be hired back relatively quickly. If anyone who follows the domestic industry really thinks this is the case nowadays, then, well, I hope you're not driving after consuming those types of drugs, as there hasn't been much "growth" at the domestics since I've been born.

The bottom line here is that the jobs banks is adding an incredible amount of inertia to the cost-cutting process, and the 1/3rd or so of workers that will be "involuntarily separated" from GM in the latest round of cuts will likely not disappear from the payroll for several years because of this. GM is likely to confront the UAW on this one; alternatively, I think the union might stand to gain a lot of favor with the public if they could come up with solutions to problems like this by themselves. As Paul Eisenstein pleads, this would allow the union to "become part of the solution".

Not to bash the folks who will be losing their jobs, but all the times I've been laid off in my career, it's been a little-or-no-warning thing, with no guaranteed pay-off or gradual transition from "employed" to "unemployed". In one case, I had to sue my former employer for my final paycheque and outstanding vacation pay. I think my experiences are more typical of the working world than the GM workers' situation, where they have (in some cases) years of notice that the layoff is coming, and then to have additional pay after the layoff for an extended period of time.

Unions can be good for their members, but this is a textbook case of the union's power endangering the health of the employer and therefore the employment prospects for all the members.