By Jeffery McCracken
Staff Reporter - Wall Street Journal
"In his 34 years working for General Motors, one of Jerry Mellon's toughest assignments came this January.
He spent a week in the "RUBBER ROOM."
The room is a windowless, old storage shed in Fkint, Michigan. It is filled with long tables, Mr. Mellon says, and has space for about 400 employees. They must arrive at 6 A.M. each day and stay until 2:30, with 45 minutes off for lunch. A supervisor roams the aisles, signing people out when they want to use the bathroom.
Their job?: DO NOTHING
This is the JOBS BANK, a two decade-old program in which nearly 15,000 auto workers continue to get paid after their companies stop needing them. To earn wages and benefits that often top $100,000 a year, the workers must perform some company-approved activity. Many volenteer or go back to school. The rest clock time in the RUBBER ROOM or something like it.
It is called the RUBBER ROOM, Mr. Mellon says, because "a few days in there makes you go crazy."
The Jobs Bank at GM and other US Auto companies including Ford Motor is likely to cost around $1.4 BILLION to $2 BILLION this year. The programs, which are up for renewal next year when jnion contracts expire, have become a symbol of why Detroit struggles even as Japanese auto makers with big US operations prosper.
While GM often blames "legecy costs" such as retiree health care and pensions for its troubles, its Jobs Bank shows that the company has inflicted some wounds on itself. Documents show that GM itself helped orginate the Jobs Bank idea in 1984 and agreed to expand it in 1990, seeing it as a stopgap until times got better and workers could go back to the factories. The idea was to help train or find jobs for senior UAW employees who would "otherwise be permanently laid off" because of better technology or higher productivity. Ford later matched the plans for its UAW employees.
Mr. Mellon, 55, joined GM in 1972, following his grandfather and father. Through the 1980's and 1990's, Mr. Mellon held jobs designing electronic systems for vehicle prototypes. In 2000, GM merged two engineering divisions, and he wasn't needed anymore.
Since then, except for a period in 2001 when he worked on a military-truck project, GM has paid him his full salary for not working. That is currently $31 an hour, or about $64,500 a year, plus health care and other benefits
About 7,500 GM workers are now in the Jobs Bank program, more than double the figure a year ago. Each person costs GM around $100,000 to 130,000 in wages and benefits, acording to internal union and company figures, meaning GM's total cost this year is likely to be around $750 million to $900 million,
One way employees in the Jobs Bank can fullfill their requirements is to attend eight or 12 week classes offered by GM. In these classes, Mr. Mellon has studied crossword puzzles, watched Civil War movies and learned about "manmade marvels like the Brooklyn Bridge," he says. One class taught him how to play Trivial Pursuit. More recently, he attended an institute in Flint called the Royal Flush Academy. It is designed for those seeking to work in casinos. Mr. Mellon says he isn't interested in casino work and left the academy after they docked his pay because he was ten minutes late comming back from lunch.
With that he arrived at the RUBBER ROOM. Every day for a week Mr. Mellon got up at 4:30 A.M. to make the 45 minute commute to the RUBBER ROOM from his home in Otisvill, Michigan. At first he read the newspaper or magazines lying around, such as Readers Digest. He talked some with acquaintances. After consersation dried up, he says he spent hours staring at the wall, hoping time would move faster.
Thw waiting "makes you want to bang your head against the wall," Mr. Mellon says. "I couldn't take it. I need to do something. And there is a supervisor who walks around staring at everyone. Its worst than high-school detention."
Mr. Mellon thinks a "line worker mentality" keeps people going back to the RUBBER ROOM. "A lot of guys sit in that room and just collect their paycheck because they don't know what else to do," he says. "They've spent 20 years tightening a nut that comes down the line. They are faced with this harsh reality, and they are just happy the paycheck still comes so they can put their kid through college."
The system gives older union workers little incentive to move to other plants, find other jobs at other companies, or retire. There is no limit on how long a worker can stay in the Jobs Bank. They don't have to look for work at their own company. Contracts allow workers to turn down any job at a site farther than 50 miles from their home plant.
In Flint, MR. Mellon also sees change on the horizon. "I understand the Jobs Bank needs to have an end to it," he says. "I mean, they've paid me like $400,000 over six years to do nothing, to learn how to deal blackjack. But buy me out. Retire me with something like $2,000 for every year I worked. I need that because you know they're going to keep cutting our health care and pensions. You are so vulnerable in retirement."
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Now we want to bailout the Auto industry and their unions? I don't think so.
Another thought: GM has more retirees on the payroll than active workers.
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