Idle Hands
Detroit's Symbol of Dysfunction:
Paying Employees Not to Work
Cost Tops $1.4 Billion a Year

By JEFFREY MCCRACKEN (from today's Wall Street Journal)
March 1, 2006;

FLINT, Mich. -- In his 34 years working for General Motors Corp., one of
Jerry Mellon's toughest assignments came this January. He spent a week in
what workers call the "rubber room."

The room is a windowless old storage shed for engine parts. 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 p.m., with 45
minutes off for lunch. A supervisor roams the aisles, signing people out
when they want to use the bathroom.

Their job: to do nothing.


This is the "Jobs Bank," a two-decade-old program under 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 do volunteer jobs or go back to
school. The rest must 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 U.S. auto companies including Ford Motor Co.
is likely to cost around $1.4 billion to $2 billion this year. The programs,
which are up for renewal next year when union contracts expire, have become
a symbol of why Detroit struggles even as Japanese auto makers with big U.S.
operations prosper.

While GM often blames "legacy costs" such as retiree health care and
pensions for its troubles, its Job Bank shows that the company has inflicted
some wounds on itself. Documents show that GM itself helped originate 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 bank was designed for a different time, a time when we were growing,"
says Pete Pestillo, a former Ford executive who oversaw union talks. The
Jobs Bank has failed to stop the outflow of jobs at Detroit's unionized auto
makers. Since 1990, GM's union payroll including former subsidiary Delphi
Corp. has fallen to about 137,000 from 358,000. Many have retired, died or
found other jobs. The rest are in the Jobs Bank.

Mr. Mellon, a 55-year-old father of two, was born in Flint. He joined GM in
1972, following his grandfather and his father, a plant foreman who spent 37
years at GM. Through the 1980s and 1990s, 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, more than double the figure
a year ago. The bank added 2,100 workers last month when the company closed
a truck-assembly plant in Oklahoma City. Each person costs GM around
$100,000 to $130,000 in wages and benefits, according 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 fulfill 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 work in casinos -- the Detroit
area has several -- and teaches students to deal blackjack and poker. Mr.
Mellon says he isn't interested in casino work and left the academy after
they docked his pay because he was 10 minutes late coming back from lunch.

With that he arrived at the rubber room. It is on the site of the famous
Flint Sitdown Strike of 1936, a 44-day walkout that helped get the United
Auto Workers union recognized at GM. The rubber room and neighboring
buildings that house a technology center are off-limits to outsiders.

Every day for a week Mr. Mellon got up at about 4:30 a.m. to make the
45-minute commute to the rubber room from his home in Otisville, Mich. At
first he read the newspaper or magazines lying around, such as Reader's
Digest. He talked some with acquaintances. After conversation dried up, he
says he spent hours staring at the wall, hoping time would move faster.

One day he asked a supervisor if he could bring in a cot. The supervisor
said no, so he pushed together four padded chairs and slept across them for
several hours. He had stayed up late the night before, anticipating this
nap.