Choice hits Chrysler’s laid-off workers

Sterling Hts. employees among first under UAW pact told to take out-of-state offers or risk losing jobs.

Eric Morath / The Detroit News

Hundreds of laid-off Chrysler LLC workers in Sterling Heights are facing the reality of the landmark UAW contract they agreed to last fall as they find themselves choosing between out-of-state posts and the possibility of permanently losing their jobs.

This week and last week, they received letters giving them just a few days to accept or decline a job at plants in Wisconsin or Illinois.

The workers at Chrysler’s Sterling Heights Assembly Plant are among the first of several thousand across the country who likely will tackle the same difficult decision as Detroit’s Big Three automakers attempt to empty their jobs banks and return laid-off workers to productive positions.

A stipulation in the agreements the Big Three reached with the United Auto Workers last fall allows the automakers to offer idled workers positions anywhere in the United States, rather than just within their region, as was true in the past.

If workers reject a certain number of offers — four at Chrysler and General Motors Corp., two at Ford Motor Co. — they can lose their jobs.

As the automakers trim their work forces through early retirements and buyouts in a bid to match production with declining demand for their vehicles, they are finding that some plants have hundreds of workers in the jobs bank, which means they are paid not to work, while other factories have open positions.

By asking workers to move or lose their jobs, automakers can clear the banks, an expensive employment protection program they set up in the 1980s to win UAW support for controversial efforts to make factories more productive. Workers in the jobs bank receive full pay. Reassigning workers makes good financial sense for the Big Three, which are fighting to return to profitability amid a shrinking domestic market.

"A jobs bank employee is the most expensive employee that you can have," said Fred Hubacker, a former Chrysler executive who is executive director of turnaround firm Conway, MacKenzie & Dunleavy in Birmingham.

In addition, once laid-off workers are placed elsewhere, the companies can fill remaining openings with new workers paid lower, second-tier wages. Those hires would receive about half the wages of current employees.

"They need to get people out of the jobs bank as quickly as they can … (and) then have a huge emphasis of hiring tier-two workers," he said.

Four days to decide

Chrysler sent separate letters to Sterling Heights workers, offering them jobs in Belvidere, Ill., or Kenosha, Wis.

A letter addressed to jobs bank employees, obtained by The Detroit News, stated: "If an employee on Protected Status declines two such offers, he/she will be placed on layoff. Employees on layoff, who decline two additional offers will be placed on Formal Leave of Absence and will retain recall rights but will receive no pay or benefits."

Karie Davis was among the workers who received a letter. She was given four days to make a choice.

Davis took a transfer to the Belvidere Assembly Plant because she doesn’t want to risk losing her Chrysler job, and the plant, about 65 miles west of Chicago, is closer to her Novi home and fiance than other outposts in the company’s manufacturing operations.

"I don’t want to go, but it seems that my chances of having a job there is better than having one here," the eight-year Chrysler veteran said, noting that the Belvidere plant makes more products and runs one more shift than Sterling Assembly.

Davis said she hopes her time in Illinois will be short — if Chrysler offers her another buyout package, as the company did earlier this year, she’ll take it.

The reassignment offers have so far been limited to Sterling Heights, Chrysler spokesman Ed Saenz said. He said the offers could extend to others elsewhere.

Chrysler Vice Chairman and President Tom LaSorda said this month that the automaker is relocating some workers around the country as those accepting buyouts and retirement plans depart.

Ford and GM are likely make similar transfer offers to their laid-off employees, but neither has done so yet.

Another round of buyout and retirement offers at GM closes May 22. After that it’s expected that openings will be created, and some workers could receive reassignment offers, GM spokesman Dan Flores said. "Any employee movement will be handled in accordance with the UAW and GM national contract," he said.

Moving difficult

During a meeting this week at UAW Local 1700, which represents Sterling Assembly workers, union officials told workers they understood that moving would be very difficult, but encouraged them to consider the offers because it would keep jobs in the hands of higher-paid tier-one workers.

The offers could affect employees differently, as not all laid-off workers are in the jobs bank. Workers are typically placed first on layoff, for as many as 48 weeks, and then flow into the jobs bank. On layoff, workers receive 95 percent of their take-home pay.

Officials at the meeting said if a worker who is laid off but not in the jobs bank rejects a relocation offer, it would not count as one of the four declines. Chrysler’s Saenz would not comment on how a rejection would affect a laid-off worker outside the jobs bank.

Several Sterling Assembly workers said they could not uproot their families to take a job in another state. They said it would be difficult to sell their homes in Michigan’s housing market but also conceded that finding a job in Metro Detroit would not be easy.

"For all the people who couldn’t take the buyout, this is a way to force them out," said Joe Kavanagh, a plant worker from Monroe.

Having less than a week to choose, he said he couldn’t make the decision to pull his children out of school and move out of state. Per the contract, Chrysler offers up to $30,000 in relocation costs, if a worker gives up his or her seniority.

Kavanagh will wait and hope a position opens at a nearby factory. "If I went somewhere else, I’d be the lowest on the roll and first one out the door," he said. "It’s too risky."