It Is Better To Be Fired By General Motors Than It Is To Be Hired By Most Companies

George Will explains:

Under contracts negotiated, beginning in 1984, with the United Auto Workers, there are about 14,700 laid-off autoworkers in the Jobs Bank. About 7,500 of them are from GM. They get paid most of their wages and benefits -- between $100,000 and $130,000 a year, for an annual cost to GM of $750 million to $900 million.

The former workers -- expected to be 17,000 by next year -- are required to do nothing that adds value to the auto companies. Some attend classes given by GM. The Wall Street Journal reports that one worker took a class in which he learned how to play Trivial Pursuit. ...

Detroit's Jobs Bank, which was GM's idea, is a product of an oligopoly's -- the Big Three domestic automakers still were such in 1984 -- misplaced sense of permanent abundance: They assumed that layoffs, if any, would be brief because expansion of demand for their products would generally be automatic. This mentality was self-defeating. It caused management to focus not on producing desirable products but on running private-sector welfare states, allocating much of the supposedly assured cash flow to fund employees' benefits. And labor's myopic focus was on extracting benefits from the corporation-as-welfare-state, not on the long-term vitality of the corporate employer.

(via Frank Lasee)

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