Could VW become another GM, a company that filed for bankruptcy in 2009?
It appears highly unlikely, but in theory, it’s possible.
Back in 1984, when Japanese automakers were challenging the dominance of the Big Three, the United Auto Workers (UAW) struck a unique deal with Detroit automakers like GM. Instead of laying off employees, workers were placed into a “Jobs Bank.”
As described in the book Crash Course: The American Automobile Industry’s Road to Bankruptcy and Bailout—and Beyond (ISBN: 9780812980752; link), the Jobs Bank program preserved up to 20,000 jobs by paying workers nearly full wages while they remained idle. In fact, they were explicitly prohibited from working!
The author writes:
“The original intent of the Jobs Bank was to provide temporary security for hourly workers on layoff. But by the 1990s, laid-off workers could remain ‘bankers’—as they were nicknamed—for unlimited time, earning 95% of their wages while not working. This well-intentioned arrangement eventually plunged automakers into red ink and threatened their very survival.”
This system persisted for nearly 30 years (!) and only ended because of GM’s bankruptcy. Without that, the Jobs Bank might still exist in Detroit today.
So, could Volkswagen adopt a similar program in Germany?
Perhaps Niedersachsen, a major shareholder in VW, might consider footing the bill for workers to earn 95% of their wages while idle.
It may sound far-fetched, but it worked for GM and the unions for decades.
Could a German Jobs Bank help sustain VW in difficult times?
By the way, the book is a fascinating read 📖
I am a project manager (Project Manager Professional, PMP), a Project Coach, a management consultant, and a book author. I have worked in the software industry since 1992 and as a manager consultant since 1998. Please visit my United Mentors home page for more details. Contact me on LinkedIn for direct feedback on my articles.
