Government bailout would continue paying "Laid-Off Workers to Do Nothing"
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.
"The short answer is, yes, this would put the workers 'out on the street.' The longer answer is that they might also be entitled to some damages or compensation." . . . .