The Zombie Plague is Over: Death of the Jobs Bank

In Business Week it was recently reported that the Jobs Bank, an insidious perk inserted years ago in the UAW’s contract with the auto industry, has been killed.  If you have never heard of the Jobs Bank, it pays auto workers 85% of their pay while furloughed. Some workers reported for years to meeting rooms where they would sit and wait for an assignment or be sent to clean public parks. All the while, they would get paid most of their wages.

The Jobs Bank essentially made labor a fixed cost for the auto makers – a cash flow parasite that could not be removed, regardless of business conditions or market realities.

As I have related to some of you, I have met people who have participated in the Jobs Bank program, and to it’s death with the New Year I, for one, say good riddance.  And stay dead.  Besides the obvious financial impact, the years of sanctioned unproductivity turned into a cultural virus for which, at the time I spoke with banked employees, I could envision no antidote.  It created an entitlement mentality, sapped work ethic, creative drive.  The Jobs Bank, by itself, created a zombie army within the Detroit Three.  I met my first Job Bank employee at the same time Alan Mulally took over the helm at Ford.  All I could think of was the uphill climb he had in front of him, not only to turn the company around financially, but to find an antidote for the Jobs Bank before the culture consumed the whole company and him along with it.

Does this scenario sound familiar?  They made a movie out of it recently.  Perhaps you’ve heard of it.

Read the Business Week article about the Jobs Bank here.