Benefits will end in 2010 for many ex-autoworkers
Benefits will end in 2010 for many ex-autoworkers
By JIM LEUTE
Sunday, Dec. 20, 2009
The Janesville Gazette Business Editor Jim Leute previews a special Gazette series of stories on the first anniversary of life in Janesville without General Motors
One year later
It’s been almost a year since SUV production ended in Janesville, triggering layoffs that staggered Rock County. What’s happened in the last year to the thousands of workers displaced by the end of production at General Motors and its supplier plants?
Actually, quite a lot, and not all of it has matched the doom and gloom some people predicted.
Transferring to another plant wasn’t an option for hundreds of local workers, particularly those who didn’t work at GM. With high hopes for new careers, many have instead decided to go to school under retraining programs for dislocated workers. Hundreds of former workers at the Janesville GM plant now are commuting to other plants, plants referred to as "Janesville South," "Janesville West" and "Janesville East." The decisions to transfer were painful and life-altering, but those who made them say it was the right thing to do for their families. When the benefits end, the local economy will crash. It’s a broad statement made by many, but it’s based on a premise that’s difficult to pin down. Just when will the benefits end, and when can the community expect to see a peak of economic hardship?
JANESVILLE — When the benefits run dry, the local economy will be really parched.
That’s been the refrain since General Motors announced in 2008 it would first trim and then end production at its storied Janesville assembly plant.
More than 3,000 workers in the local auto sector were laid off within a year. More than two-thirds of them worked at GM; companies that supplied the local plant displaced the rest.
Determining when the benefits end is difficult, and it involves a complex maze of state unemployment programs, emergency federal extensions and union contracts. It also entails—at least in Janesville—three very different employee groups laid off in phases as the local auto industry died.
For some of those workers, bits and pieces of the benefit package have ended or will end in coming months. Others can count on some sort of help into the middle of 2011.
All indications are, however, that the local economy could take the brunt of the benefit bust in the summer and fall of 2010.
Generally, unemployed individuals are eligible for 26 weeks of regular benefits that now carry a maximum benefit of $388 per week.
But depending upon when they were laid off, workers might be eligible for up to 99 weeks of benefits because of a series of federal extensions. The extensions, which began in July 2008, have tacked 73 weeks onto the original 26 weeks.
Dick Jones, a spokesman for the state’s Department of Workforce Development, said it’s difficult to estimate when benefits will end for certain groups. But most workers laid off because of the GM closure still are collecting federal unemployment benefits, he said.
Both GM and its suppliers routinely furloughed employees in the past, particularly during mid-summer shutdowns and other periods of industry sluggishness.
"As a result, many workers for GM and its suppliers claimed unemployment prior to the layoffs that occurred when GM eliminated the second shift and ultimately closed the plant," Jones said. "The dates when these workers filed their first claim for unemployment insurance vary significantly.
"As a result, there is not one uniform starting date for benefits to different waves of layoffs."
The automaker cut one of its two shifts of sport-utility vehicle production in Janesville in June 2008. It then announced all SUV production would end, and Janesville’s final Tahoe rolled off the line Dec. 23.
The plant’s medium-duty truck production ended in April.
From a benefits perspective, the 2,200 GM workers involved were better prepared for a layoff than the 998 employees at Lear Corp. or LSI, two local just-in-time suppliers to the plant.
Since the layoffs, a majority of the GM workers have taken matters into their own hands. As of Nov. 30, only 466 of the original 2,200 still were on layoff status, according to GM. Nearly 900 left the automaker under attrition packages, and more than 500 transferred to other GM plants.
United Auto Workers Local 95 represented the hourly workforces at GM, Lear and LSI, but their contracts differed in one key aspect. GM workers are eligible for Supplemental Unemployment Benefits, a program that complements state unemployment compensation to a level that’s about 72 percent of gross income or 95 percent of take-home pay.
To understand where laid-off GM workers are today, it’s important to understand where they were just 18 months ago.
When the first wave of GM layoffs hit in mid-2008, workers were eligible for just 26 weeks of state unemployment. They also received SUB pay to complement the state checks. When the unemployment checks were scheduled to end, SUB pay was expected to continue for another 22 weeks, providing GM workers with 72 percent of their gross income or 95 percent of their take-home pay for 48 weeks.
Then, the workers would move into another UAW-GM negotiated program: the Jobs Bank, which essentially paid workers most of their wages through the end of the contract, even if they weren’t working.
The federal extensions on unemployment benefits and the automaker’s bankruptcy changed all that.
Unemployment benefits were extended from 26 weeks to 99 weeks.
GM and the union agreed to eliminate the Jobs Bank program and make changes to the SUB pay program.
The modified 2007 national contract now provides 52 weeks of SUB pay for idled workers with more than 20 years of service on the date they were laid off. That ensures them 72 percent of their pay from the combination of unemployment and SUB pay or purely SUB pay when unemployment runs out.
At the end of those 52 weeks, the workers will move into a Transition Support Program and collect another 52 weeks at half pay.
Workers with 10 to 20 years get 72 percent SUB pay for 39 weeks and half pay for an additional 39 weeks. Those with fewer than 10 years get 26 weeks at 72 percent and 26 weeks at 50 percent.
The contract also reset the clock on SUB and TSP to June 1, 2009.
So what does that mean for those GM workers still laid off in Janesville?
For the most part, unemployment benefits will continue—barring any more extensions—for 99 weeks after the employee’s layoff date. For workers laid off in the summer of 2008, they generally will end in May 2010. Those laid off in January 2009 and April 2009 generally will see unemployment compensation expire in December 2010 or March 2011, respectively.
SUB and TSP pay will expire at the end of May 2010 for workers with fewer than 10 years.
The date shifts to the end of November 2010 for workers with 10 to 20 years and May 2011 for those with more than 20 years.
Benefits, however, include more than supplemental unemployment income.
There’s also the matter of health care, and the union and management addressed that when they modified the 2007 national contract.
Workers with fewer than 10 years lost their health care coverage in September.
Workers with 10 or more years get coverage for 25 months from the date they were laid off.
For the most part, GM laid off its workers in three waves: July 2008, January 2009 and April 2009. Depending on the date of their layoff, workers who still have health care coverage can generally expect it to end in August 2010, February 2011 or June 2011.
Displaced workers of the seating manufacturer are in a similar position as far as unemployment benefits, which generally will run for 99 weeks.
But they differ in other regards.
The 707 displaced Lear workers didn’t have contract provisions for SUB pay. When their state and federal unemployment benefits run out, that’s it.
And their health care coverage was clipped much more quickly than that of their UAW brethren at GM. It’s been gone for months.
"Depending on the date of the layoff, the health care was extended from the end of that month for another three months," said Mike Vaughn, Local 95’s shop committee chairman at Lear. "Fortunately, we were able to negotiate that with Lear."
Lear workers also were fortunate because they had access to another form of assistance not available to workers at LSI or GM.
The U.S. Department of Labor ruled in early 2007 that displaced Lear workers would be eligible for Trade Adjustment Assistance.
TAA status is granted when global competition displaces workers. It pays unemployment benefits beyond the expiration of state and federal programs and offers up to $15,000 for additional education and re-training for eligible workers.
In some cases, TAA extends benefits—either unemployment compensation or training expenses—for up to a total of 130 weeks for those workers who are enrolled in approved programs.
The original Department of Labor ruling was based on the local Lear operation’s loss of welding work to a facility in Canada. Once Lear was approved for the program, any workers laid off through January 2009 became eligible, regardless of whether they were laid off because of foreign competition.
Workers at LSI were ruled ineligible for the same assistance in 2008 after the department determined that they didn’t meet the program’s guidelines because they didn’t manufacture a product.
Earlier this year, GM workers learned that they, too, were ineligible because their layoffs were the result of domestic trouble rather than global competition.
Jones said that 570 local people are receiving TAA services, including displaced workers from Lear, Alcoa Wheel and United Star Industries in Beloit. Based on a cost estimate of about $10,000 per participant, the local workers are sharing in more than $5 million in TAA assistance, he said.
The situation for LSI employees who haven’t found other work is the most cut-and-dried.
For the most part, they are eligible for up to 99 weeks of unemployment compensation. Depending on whether they were laid off in summer 2008 or early this year, their unemployment benefits will end in either May or November.
LSI employees also received five months of health care coverage after they were laid off. That expired months ago, as it did for the Lear workers.