Postby Jeff Boettcher » Fri Dec 19, 2008 12:11 am
Catfish, What you are referring to are "Job Banks". Below is a copy of a newpaper article posted in November:
"Thousands of laid-off auto workers get paid $31 an hour to sit around and do nothing all year under a controversial program that could continue even if American taxpayers bail out the American auto industry.
The program, called "Jobs Banks," has been around for 24 years. Some of the employees at jobs banks choose to do community service, but others do crossword puzzles and watch TV all day -- or just stare at a wall. If you're a laid-off auto worker, it's what comes with your pink slip, thanks to a deal struck in 1984 between the United Auto Workers and the Big Three carmakers.
The program is likely to continue if Congress approves a $25 billion bailout of the industry. But if the automakers go bankrupt, some analysts say, they may be able to eliminate the program, which would abruptly eliminate benefits to the workers in it.
"Subject to some limits, management could find itself in a position to terminate the program," said Edward R. Morrison, a professor at Columbia Law School and a bankruptcy law expert. "The [laid off] employees may become 'creditors' with claims against the company -- they would be in the same position as bond holders and other creditors."
A second bankruptcy law expert, George Mason University Professor Todd Zywicki, said, "This is exactly the sort of thing bankruptcy is useful for ... to get rid of programs that don't do the company any good."
$31/hour for "laborers" doing nothing? Add that to executives getting bonuses for the same & we have an explanation for why the U.S. auto industry is sucking wind.
I have another example. I bought a 2003 Saturn Ion two years ago.
I did some research, but bought with confidence because of friends who were over 100K miles with their Saturns & lovin' it. It turns out that the 2003 - 2005 Ion & 2006 - older Vues were equipped with a new type of transmission: Continuous variable speed transmission (CVT). When this belt driven transmission started failing, GM didn't issue a recall. (Not a safety issue.) They extended their warranty to 75K miles. Naturally mine failed at 80K. Replacement tranny = $5100!
After doing some internet digging I found that GM has settled a class action suit on these tranmissions that will be finalized Feb. 17, 2009. After a call to GM Saturn I was informed that they would assume 75% of the replacement cost. If I hadn't had the capability to look around on the internet to find out that this transmission design was defective, I would have been liable for a $5100 + labor repair bill.
We should trust them to get solvent after the bail out? They produce defective products, avoid recalls to fix an obvious problem, pay people to not work, give bonuses to executives managing firms that are losing boatloads of money.
What if there were no hypothetical questions?