Through the “jobs bank” program created by the United Auto Workers, union members receive pay even when they are laid off (with no real cut off date).

Each automaker’s jobs bank varies, but at GM, laid-off workers could get 85 percent of their base pay, plus benefits, without reporting to work while the company tried to find them jobs elsewhere. Or workers could get full pay by reporting to a factory or union hall, where they could be called upon to perform community service or tasks around the plant.

Starting Monday the 1,600 people who are currently receiving the benefit from GM will be forced into the unemployment line. And while they have been able to stay in the jobs bank for years, unemployment usually only lasts around 48 weeks.

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In a 20/20 segment titled “Gimme A Break” John Stossel said “Toyota isn’t asking for a bailout. Neither are Honda or Nissan. Yet, they all sell and build cars in America.” He says that Honda just opened a new plant and is producing MORE cars.

So why can’t the Big 3 handle it?

He puts part of the blame on The United Auto Workers union and their chief Ron Gettelfinger. First, the Honda/Toyota plants don’t have the same unions, so they don’t have to deal with the strikes. Second, “job banks” where some employees are paid 95 percent of their wages to sit. Third, Gettelfinger is hesitant to concede to a lot of changes for a bailout. This is a problem because Honda just hired 900 new employees, and they are being paid $18.41 an hour. The UAW employees are being paid $29 plus benefits. Economist Peter Morici of the University of Maryland said ,”The wage package is just too rich in Detroit, the benefits package is just too rich and the cars show it. The upholstery is not as nice. Why? Because they have to pay these high labor costs so they use cheaper materials.”

ABC News: Why the Auto Bailout Would Be a Big Mistake

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