GM Generali

Generali (AQEU:GM)
Historical Stock Chart

From Jul 2019 to Jul 2024

Chrysler LLC, in a cost-cutting deal struck with the United Auto Workers, suspended its "jobs bank" program Monday, impacting about 1,000 union workers.

The UAW and Chrysler reached a deal late last week to temporarily end the program, which requires the auto maker to "bank" employees rather than firing them during production cutbacks. Workers in the program receive more than 85% of their pay based on state unemployment benefits and "sub pay" provided by the company.

Chrysler hasn't publicly commented on the program's suspension since UAW discussions are private. UAW sources confirmed the program's suspension Monday.

Closing the jobs bank was one of the terms Chrysler, General Motors Corp. (GM) and the union had to agree to in order to continue accessing low-interest loans from the federal government. Chrysler and GM both received approval last year to access money to avoid bankruptcy.

Chrysler has received $4 billion and is waiting on another $3 billion, while GM has received $9.4 billion and hopes to access another $4 billion. Both companies have to submit viability plans on March 31.

GM spokesman Tony Sapienza said the auto maker is also in talks with the UAW on suspending the program. He didn't disclose how many workers are in the program.

Ford Motor Co. (F), which didn't take any federal money, is also seeking similar concessions with the UAW. Ford has about 1,400 workers in the bank as of November, receiving anywhere from 80% to 100% of their pay.

Shares of Ford rose 12.2% to $2.02 in trading Monday. GM shares were down 2% at $3.42.

-By Jeff Bennett, Dow Jones Newswires; (248) 204-5542; jeff.bennett@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary. You can use this link on the day this article is published and the following day.