Where Fun Comes to Die

Today U.S. automakers go back to Congress asking for a handout.  In hopes of currying favor with lawmakers, the auto workers union has decided to make its own paltry concessions.  Under the headline, “Auto Workers Give Up Notorious Featherbed“:

The union is suspending its most ridiculed perk, called the JOBS bank. That program, set up as part of a contract agreement reached between Detroit’s Big Three and the union decades ago, pays auto workers 85% of their pay while furloughed. Some workers reported for years to meeting rooms where they would sit and wait for an assignment or be sent to clean public parks. All the while, they would get paid most of their wages.

The JOBS bank had the effect of paying some employees 85% of their wages for years of unemployment.  The inefficiencies of such an approach are astounding.  Not only are we paying people for doing nothing (the perverse incentives of which were previously discussed here), as the article notes:

By making labor a fixed cost, it altered their manufacturing strategy. For most of the past 10 years, the car companies preferred to discount models with big rebates rather than cut production, because they had to pay workers no matter what.

The union is complaining that it had to make any concessions at all:

Because of the environment we’re in, we face difficult challenges.  I use to cringe from the word ‘concessions.’ But that’s what we did. The important thing is to secure these jobs.

Really?  Is that the most important thing?

Meanwhile, U.S. automakers have upped their bailout price tag from $25M to $34M.  Their previous attempt to solicit money from the government was laughed out of Congress for not explaining how the money would be used to slim down operations and make them competitive with their foreign counterparts when their labor costs are $18 more an hour than Toyota‘s.