GM Relocation Bonus Fails to Entice Laid-Off Workers : Labor: Some ex-Van Nuys plant employees prefer a paycheck for not working to $25,000 and a job elsewhere.
What does it take to get someone to leave Southern California?
For several hundred laid-off employees of General Motors’ closed Van Nuys assembly plant, even offers of new GM jobs in other states--along with $25,000 signing bonuses--aren’t enough.
Naturally, there’s a catch: The laid-off auto workers are receiving full pay plus health insurance and other benefits from GM for doing nothing but biding their time.
And under the current union contract, they can continue receiving most or all of that jobless compensation until September, 1996--more than four years after the last Camaros and Firebirds rolled out of the San Fernando Valley plant.
Although that may feel like winning the lottery to some workers, the arrangement has become an increasing annoyance to GM. So the auto maker is trying to exercise its option to wiggle out of the situation--and relieve its staffing shortages elsewhere--by coaxing ex-Van Nuys employees to get back to work and onto the company’s production lines.
The issue has whipped up conflicting emotions inside and outside the circle of former Van Nuys workers.
The enhanced relocation packages recently offered to those still on layoff have infuriated ex-Van Nuys workers who previously accepted far stingier moving allowances. The new packages--including the $25,000 bonuses just for agreeing to take new jobs, along with moving expenses and other cash incentives paid over two years--are worth up to $60,000.
Back when the plant was shut in 1992, the maximum relocation package was $3,324. Frank Macomber, a Van Nuys veteran who took a GM job in Indiana after the San Fernando Valley plant closed, resents what he regards as the company rewarding people who have shirked work for two years.
“We’ve been all over the country, trying to stay with GM,” said the 42-year-old Macomber, referring to transfers to plants in Oklahoma and Louisiana when he encountered previous layoffs.
Compared to the people getting $60,000 relocation packages today, “we got a raw deal,” Macomber said. “We were all Van Nuys employees. We all should have had the same option.”
But GM officials believe that the $60,000 packages are what they need to spend to get the remaining laid-off workers to relocate and resume working. It broached the offer to the ex-Van Nuys workers two months ago and recently started making the package available to workers from four Midwestern plants.
GM wants to transfer these veteran employees to plants where more staff is needed because of the company’s surging sales and the large number of workers who left to accept early retirements and buyouts in recent years.
“We’ve thought it out carefully, and talked to the union about ways of getting people back” to work, said Charles Licari, a company spokesman.
Karen Longridge, a spokeswoman for a GM components division that has hired some Van Nuys workers, added: “We obviously would much rather be paying these people to be working than not working.”
In all, about 1,900 of the 2,600 workers who lost their jobs when the Van Nuys plant closed in 1992 had retired, taken buyouts or transferred to other GM facilities by this spring.
Over the last two months, an unspecified number of the remaining 700 Van Nuys workers also have decided to retire or relocate. In fact, two of the six GM plants scattered across the country getting new workers through the $60,000 relocation program already have all the recruits they want. For some workers, the relocation money is offsetting losses that they will suffer in selling their homes in the depressed Southern California real estate market.
Other workers have stayed here in hopes that they can land one of the 200 jobs being created at a seat-cover sewing plant in Brea--a facility that GM opened this spring specifically to put more of the former Van Nuys plant people to work. About half of the workers already have been chosen and are in training.
Still, that leaves several hundred people who are holding out, content to collect GM unemployment checks of $740 a week or more, until the final days of the union contract in two years.
Some of these Van Nuys veterans are committed to staying in Southern California because their spouses have good jobs here or because they don’t want to leave their families and friends. Others are in school, preparing for new careers.
And yet others simply “are milking it to the end,” said Ray Knudson, a retiree from the GM plant and a trustee of Local 645 of the United Auto Workers, which represents the former Van Nuys workers. Knudson said some are earning money from other jobs while collecting their GM checks.
But Knudson and other former Van Nuys workers say they are justified in “milking” the company. They say that GM reneged on a promise to bring in a new car line to keep the plant open after union members agreed to new work rules sought by the company. “GM done us wrong,” Knudson said.
GM spokesman Licari declined to say whether the company ever made such a promise.
One of the workers still angry about the plant closing is John Dominguez of Palmdale, who was an electrician at Van Nuys. He says GM has offered him at least 20 jobs at plants in other states over the past two years, but he has turned them all down. Instead, he is taking courses at Antelope Valley Community College, with the eventual aim of transferring to a four-year college and then perhaps going into teaching.
Does he feel as though he is soaking GM by taking its money even after rejecting the company’s offers? Not a chance.
“I look at this and say, ‘GM ought to pay for all of the people it is screwing,’ ” said Dominguez, 42, who worked at GM for nearly 22 years.
Besides, Dominguez said, his union--the United Auto Workers--has given up wage increases over the years in exchange for winning more generous benefits for laid-off workers. Now that strategy is paying off for him. “It was a good move by the UAW,” he said.
The big moment of decision for Dominguez will come in 1996, when the GM payments run out. Dominguez concedes that he might be tempted to return to the company then, if he still has a job offer, particularly if he isn’t close to getting his four-year college degree.
With a GM job, “the money is there, no question about that,” he said. “But after 22 years at GM, it’s not necessarily the money anymore. I put a lot of myself in that plant. I’d like to try something else.”
Another Van Nuys veteran, Terri Varela, is trying to avoid being relocated by GM from Southern California for both medical and sentimental reasons.
“I was born and raised in California,” she said. “I’m 57 years old. Why would I want to start somewhere else? I’ll work (at an out-of-town GM plant) to survive, but as soon as I can, I’ll come home.”
Meanwhile, though, Varela is fighting for a medical retirement from GM. She has undergone surgery for back and wrist injuries that, she believes, came from her job. For 18 years, she polished car hoods, roofs and other sections.
She bitterly recalls the treatment that she received from company doctors when she reported her back and wrist pains.
“They kept telling me there was nothing wrong with me, that with a little heat treatment, I’d be all right,” Varela said. “When you go to a doctor in the plant, or one of the doctors they send you to, they are all for GM.”
“Right now, I’m sitting and waiting,” Varela said, as she waits to see how her injuries heal and how GM responds to her request for a medical retirement. “It’s mind-boggling trying to figure out what you’re going to do with your life.”
In the last few weeks, GM has put added pressure on some workers to come back by sending them additional out-of-town job offers. The catch is that if the workers reject the offers, the company could in a year reduce their unemployment benefits.
Still, even that is a fairly mild action: The workers’ pay would fall to about 70% of what they used to earn, versus the 100% they receive now. The workers also would lose their dental benefits, but still keep other health coverage.
Meanwhile, the ex-Van Nuys workers’ arrangement with GM bewilders outsiders. Knudson cited the time when some of the laid-off workers refinanced their home mortgages and he got a call at the union office from a mortgage loan processor who needed to check on their incomes.
Knudson said the mortgage specialist was dumbfounded when he explained the situation to her. As he recalls it, the caller replied, “What do you mean they get paid to stay home? When do I get a job like that?”
