4 ms·
The "jobs bank" concept, which all detroit automakers have a form of, has been going on for decades. You come to the factory, and play cards or watch TV, potent
by linksnapzz 3y ago
The "jobs bank" concept, which all detroit automakers have a form of, has been going on for decades. You come to the factory, and play cards or watch TV, potentially for years, draw a paycheck and benefits...until you take your retirement.
It was originally conceived as a way to make it less likely to offshore production: "look, you have thousands of workers you're already paying, just twiddling their thumbs! Give them some cars to build!"
This has not quite panned out.
- csours 3y agoDisclosure: I work for GM. Anything here is solely my own opinion or understanding. The jobs bank went away in the 2009 bankruptcies/reorganization.
- linksnapzz 3y agoI was astounded the first time I read about it in the '90s; and even more so when it was still going on in 2006. The fixed cost of labor as a whole, and not just salary + benefits for a worker, but n workers at that rate, is daunting. Especially when it would be possible to build the same # of units with .25n workers.
- csours 3y agoDisclosure: I work for GM. Anything here is solely my own opinion or understanding. (Repeating because this is more opinionated) The bankruptcies weren't caused by one thing, but cost of labor was a large factor. Perhaps a bigger factor was the pressure to keep producing non-competitive, money losing products so as to maintain employment numbers. Unions do a lot for their members, and they should, but they cannot save a bad product. In my opinion, over-financialization was the other top factor. You can read "Bean Counters vs Car Guys" by Bob Lutz for an explanation of this.