Front Page Jobs Bank Embarrassment

The GM “Jobs Bank” has come up many times here before, but now the Wall St. Journal has a front page article (subscription required). The headline: “Detroits Symbol of Dysfunction.” Other accounts have put the number at 12,000, the WSJ says it’s 15,000 workers being paid to not work. That’s total UAW workers, about half of which are GM employees (including 2200 people from the recently-closed Oklahoma City plant, the first time an entire plant’s workforce has been Jobs Bank-ed, according to the AutoBlog).

Highlights (lowlights?) from the article:

  • “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.”
  • “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.”
  • “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.”

Now there is some real waste, from a societal standpoint. Not only are we not making use of the autoworkers’ experience and skills (yes, they have some), but we’re making people burn all that gas to drive and do nothing. They might as well just cut checks and let him “work” via the internet!

  • “Mr. Pestillo, the former Ford executive, and others see the Jobs Bank as a corrosive influence with significant indirect costs because it encourages auto makers to build more vehicles than consumers want. Companies figure it is better to build cars with little or no profit margin than to pay people not to work, he says. They also may keep rote work in-house even though it would be cheaper to outsource.”

Ah, the waste of overproduction! What a mess. The Jobs Bank seems well intended in its origin, to help re-train excess employees, but it turned into a “high school detention” environment. Sure, some employees did volunteer work or other worthwhile things. GM was well intended, thinking they could grow their way out of the problem of excess employees, but that didn’t materialize either (nor did the “lights out factory” run by robots). If GM had focused on lean and true people development, instead of chasing Roger Smith’s robot dreams, imagine where they might be today.

One GM employee describes:

  • The Jobs Bank “has been wonderful for me. It’s doing what it is supposed to do, which is make it so I won’t be a burden on society.” But based on his studies, he has a low opinion of GM: “They took the Toyota concept of lifetime employment and applied it to the GM culture and what they did was create a bureaucracy. That’s what GM does.”
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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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