WHY BIG AUTO IS NOT GOING TO MAKE IT

From today's WSJ. Is it any wonder why Delphi and U.S. auto manufacturers (GM in particular) are circling the drain? They will have no real chance to compete until the union albatross is discarded.

It doesn't take a genius or "Office Space" style efficiency expert to see the problem that these kinds of costs cause for the ability to compete.

I posted about this back in October-'05 as well.

WSJ.com - Detroit's Symbol of Dysfunction: Paying Employees Not to Work: "FLINT, Mich. -- In his 34 years working for General Motors Corp., one of Jerry Mellon's toughest assignments came this January. He spent a week in what workers call the 'rubber room.'

The room is a windowless old storage shed for engine parts. It is filled with long tables, Mr. Mellon says, and has space for about 400 employees. They must arrive at 6 a.m. each day and stay until 2:30 p.m., with 45 minutes off for lunch. A supervisor roams the aisles, signing people out when they want to use the bathroom.

Their job: to do nothing.

This is the 'Jobs Bank,' a two-decade-old program under which nearly 15,000 auto workers continue to get paid after their companies stop needing them. To earn wages and benefits that often top $100,000 a year, the workers must perform some company-approved activity. Many do volunteer jobs or go back to school. The rest must clock time in the rubber room or something like it.
...
The Jobs Bank at GM and other U.S. auto companies including Ford Motor Co. is likely to cost around $1.4 billion to $2 billion this year. The programs, which are up for renewal next year when union contracts expire, have become a symbol of why Detroit struggles even as Japanese auto makers with big U.S. operations prosper.
...
Mr. Mellon, a 55-year-old father of two, was born in Flint. He joined GM in 1972, following his grandfather and his father, a plant foreman who spent 37 years at GM. Through the 1980s and 1990s, Mr. Mellon held jobs designing electronic systems for vehicle prototypes. In 2000, GM merged two engineering divisions, and he wasn't needed anymore.

Since then, except for a period in 2001 when he worked on a military-truck project, GM has paid him his full salary for not working. That is currently $31 an hour, or about $64,500 a year, plus health care and other benefits.

About 7,500 GM workers are now in the Jobs Bank, more than double the figure a year ago. The bank added 2,100 workers last month when the company closed a truck-assembly plant in Oklahoma City. Each person costs GM around $100,000 to $130,000 in wages and benefits, according to internal union and company figures, meaning GM's total cost this year is likely to be around $750 million to $900 million.

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."