11/25/2008

Government bailout would continue paying "Laid-Off Workers to Do Nothing"

My son Maxim has this piece up at Fox News:

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." . . . .

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2 Comments:

Blogger Bill said...

The airlines have used BK repeatedly to stay in business. The taxpayers are already paying the pension of many retired airline pilots, at a sum greatly lower than the pensions would be had the companies properly funded the pensions. Why should the auto makers or banks get taxpayer assistance. BK could get things back on track. To pay someone $31 and hour to sit on their duff is crazy.

11/25/2008 9:23 PM  
Blogger Mberenis said...

Everyone thinks the bailout's aren't going to affect them, but they already are in many positive ways that no one sees. Most people don't realize how much money there is out there. During economic times like this, there is more money to be had than ever. Because of the bailouts and economy, lenders are bending over backwards to bail you out too. Believe it or not, there is people getting tons of cheap money nowdays to start businesses, buy homes, pay off debt, and more. Bailout is for You Too!

11/28/2008 6:44 PM  

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