Author: Site Staff

General Motors will cut about 2,000 jobs at two plants and plans periodic shutdowns at about half of its 16 U.S. factories as consumers continue to shun new vehicles.

The automaker will eliminate one shift at the end of the quarter at its Lordstown, Ohio, plant and its factory in Delta Township, Michigan. In addition, nine of GM’s other U.S. plants and its Oshawa car factory in Ontario will be idled for “some number” of weeks through midyear, GM spokesman Chris Lee said Monday, January 26.

The cutbacks mark GM’s latest attempt to shrink bulging inventories while preparing a viability plan for the U.S. government next month to safeguard $9.4 billion in federal loans. The automaker began phasing out two other shifts in November, slowed production by a combined 56 percent at two other plants and halted work at nearly all its North American plants after the holiday shutdown.

“We’re just aligning production with market demand,” Lee said. “Nobody was able to buy any cars,” he said, referring to the credit crunch that has deepened the U.S. recession while dragging vehicle sales to 26-year lows.

Forecast lowered again
This month, GM lowered its 2009 industry sales forecast to 10.5 million vehicles from a projection as high as 12 million in December.

The Lordstown plant ramped up from two shifts to three last summer as soaring gasoline prices boosted sales of small cars. But in November, GM said it would return the plant to two shifts February 2.

The changes announced Monday will drop Lordstown to one shift April 6, with the first and second shifts working alternate weeks starting February 9. The plant, where workers make the compact Chevrolet Cobalt and Pontiac G5, will lose about 800 jobs.

The Delta Township plant, which produces the Buick Enclave, GMC Acadia and Saturn Outlook crossovers, will lose about 1,200 workers. Its two shifts will alternate starting February 2, with the reduction to a single shift taking effect March 30.

GM began 2009 with a 102-day supply of new vehicles, down from a 139-day stock December 1. GM’s figure is higher than the January 1 industry average of 94 vehicles, which in turn is 50 percent above the level considered normal.
All of the North American factories will resume production at some point this quarter, Lee said.

‘Devastating’
The Lordstown cuts are “devastating” to an area that has lost 2,000 jobs as a result of GM’s last cuts, said Jim Graham, president of UAW Local 1112. But automakers can’t control having to make recent cuts, he said.

“The economy’s in the tank,” Graham said. “People are afraid to buy big-ticket items like cars, and we’re hopeful by midsummer things will start opening up, now that there’s a new administration in place.”

The Lordstown plant still has a “bright” future because in 2010 it will start making the Chevrolet Cruze, which Graham said he hopes can achieve more than 40 mpg.

Along with eliminating the Lordstown factory’s third shift, GM’s latest production cuts mean its sedan plant in Orion Township, Michigan, also loses a shift February 2. The truck plant in Pontiac, Michigan, and sedan plant in Hamtramck, Michigan, also begin producing 44 and 68 percent fewer vehicles per hour, respectively.

GM sold 3 million vehicles in the U.S. last year, down from 3.8 million in 2007. The industrywide total last year was 13.2 million.

Filed by Chrissie Thompson of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com

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A vast array of proposed rules and regulations that have not been officially adopted or have been recently adopted but not implemented, are now subject to White House review before further action.

A memo issued to federal agencies immediately after President Barack Obama occupied the White House on January 20 freezes implementation of all pending and recently issued regulations, some with risk management and employee benefit implications.

A vast array of proposed rules and regulations that have not been officially adopted or have been recently adopted but not implemented, are now subject to White House review before further action.

For example, the memo signed by Obama’s chief of staff, Rahm Emanuel, halts implementation of a proposed rule mandating how the U.S. Occupational Safety and Health Administration and the U.S. Mine Safety and Health Administration conduct risk assessments of toxic substances and hazardous chemicals in the workplace.

Democrats and labor charge the rule would weaken worksite regulation, and they say President George W. Bush’s administration hurried to implement it before he vacated the White House.

The U.S. Chamber of Commerce supports the measure, which was posted in the August 29 Federal Register. The chamber argues it would improve safety by standardizing analysis of risks posed by chemicals and toxins.
 
Another proposed regulation that could be affected would require that contracts between employee benefit plans and plan service providers disclose any conflict of interests the service providers may have and the reasonableness of their fees. It appeared in the December 13, 2007, Federal Register, but a final rule was never implemented.

An interim Coast Guard rule that would have been effective March 17 could also be affected. It seeks to prevent pollution from ships by amending regulations for equipment used to reduce oil discharges. It was posted in the January 16, 2009, Federal Register.

Filed by Roberto Ceniceros of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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The Pension Benefit Guaranty Corp will remain on the GAO’s “high-risk” watch list for 2009, amid concerns that the nation’s economic crisis could lead to more pension plan terminations that would increase the agency’s budget deficit, according to a Government Accountability Office report.

The PGBC’s deficit declined to $11.2 billion as of September 30, from $14.1 billion at the end of the previous fiscal year, the GAO said in the report, “High-Risk Series, an Update.” But it also said the financial crisis had probably eroded the funding of many large plans and lowered the credit rating of many plan sponsors, “developments that the most recent (PBGC) estimates may not reflect.”

The PBGC has been on the GAO’s watch list since July 2003.
Last year, the PBGC increased its equity and alternative-investment exposure, moving away from fixed income.

“PBGC believes this change will help it meet its long-term financial obligations, but it also increases the risk of large investment losses,” the GAO said in its report. “Further, the long-term decline of the DB system continues to erode PBGC’s premium base, with PBGC insuring about 65% fewer plans than it did 15 years ago,” GAO said.

The report noted that recent legislation had relieved the pension funding obligations of some plan sponsors.

“In addition, the financial fate of the Detroit automakers, which sponsor very large DB plans, is also uncertain,” the GAO said. “These developments likely increase PBGC’s risk exposure, perhaps significantly” should the companies fail leaving greatly underfunded plans.

Giving the PBGC the legal authority to charge risk-based premiums could improve the agency’s financial standing, Jeffrey Speicher, a PBGC spokesman, said in a statement. The PBGC has authority to charge only a flat-rate premium based on the number of participants in a plan and to assess additional premiums on underfunded plans.

“Basing premiums on actual risk of failure is an idea that has long been on the table, and one that may continue to draw interest when future reforms are considered,” Speicher said in the statement.

Filed by Doug Halonen of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Events you’ll want to put on your schedule July – September, 2009 July July 21-22 Indianapolis CareerXroads Colloquium: College Recruiting Hosted by Eli Lilly and Co., this program will discuss recruiting and sourcing college graduates and interns, as well as the concept of onboarding. Each colloquium relies on attendee input prior to the event and the agenda will be adjusted to reflect the interests of participants. https://cxr.works/ July 25-28 Cleveland CHART Hospitality Training Conference This 78th semiannual conference is designed to help hotel and restaurant trainers and HR professionals solve key issues facing the hospitality industry, focusing on training as the core of creating and retaining engaged employees. The conference also offers participants opportunities to take part in community service projects in the host city. www.chart.org July 29-30 Chicago Maximizing ROI for On-Site Employee Health Clinics This event, hosted by the World Research Group, will examine case studies on how on-site employee health management leaders have created an in-house storefront for all health, disease management, wellness and disability management programs. www.worldrg.com/roionsite August August 11-12 Minneapolis Sourcing and Other Magical Tricks to Attract the Best and Brightest This CareerXroads colloquium, hosted by RSM McGladrey, will discuss staffing roles: full-service recruiters versus sourcing specialists; how high is too high for employee referrals; and new recruiting technologies. Each colloquium relies on attendee input prior to the event, and the agenda will be adjusted to reflect the interests of participants. https://cxr.works/ August 27-28 Brisbane, Australia National Workplace Safety Summit The summit will focus on occupational health and safety strategy and practice to drive financial gain, promote a positive organizational culture and enable broad health and safety outcomes for employees. It will also look at Australia’s national harmonization plans and feature presentations from winners of the 2008 National Safe Work Australia Award and QLD Work Safe Award. www.informa.com.au/ September September 1-4 Phoenix 2009 Arizona SHRM State Conference The Arizona Society for Human Resource Management presents its 15th annual state conference, focusing on HR leading the way in difficult economic times. www.azshrm.org September 15-16 Philadelphia Staffing Alignment, Process and Metrics This CareerXroads colloquium, hosted by Comcast, will discuss evolving a staffing organization and structure; developing process maps that stakeholders can follow; benchmarking externally versus internally; and candidate engagement as a way to measure impact on corporate performance. Each colloquium relies on attendee input prior to the event, and the agenda will be adjusted to reflect the interests of participants. https://cxr.works/ September 21-23 Reston, Virginia Government Talent Management Summit The Human Capital Institute’s government summit features global leaders in strategic talent management for three days of discussion on transforming an organization or agency from traditional HR to new talent management practices. hci.org/hci/events_conference_govt_talent_summit_2009_09.guid September 22-23 Uncasville, Connecticut National Employment Practices Liability Insurance ExecuSummit This fourth annual event, designed specifically for EPL insurance executives, will cover employment law updates, underwriting employment practices liability insurance in a difficult climate, how EPL insurance is affected by bankrupt insureds, ethical dilemmas, effective ways to deal with the EEOC, and EPL insurance for international companies. www.summit-01.com September 29-30 Barcelona, Spain European Training and Development Summit The aim of the summit is to provide a platform for current trends and strategies, develop employees and build on their skill sets and competencies, expand business relationships and improve company performance. This event also offers an exclusive opportunity to have one-to-one meetings with key industry leaders. www.bmeglobal.com

Send announcements of upcoming events for listing consideration to calendar@workforce.com.

Financially ailing wireless communications provider Sprint Nextel Corp. is suspending its 401(k) plan match for 2009 as part of a drive to reduce costs by $1.2 billion.

The suspension of the 401(k) plan match comes three years after the company’s last retirement plan change. At the beginning of 2006, Sprint Nextel froze its defined-benefit pension plan. The change affected Sprint Co. employees who had been with the company before its merger with Nextel Communications Corp. Nextel did not have a defined-benefit plan.

Last year, Overland Park, Kansas-based Sprint Nextel matched 100 percent of employees’ salary deferrals, up to the first 5 percent of pay.

The suspension of the match is one of several cost-cutting moves at the company, including laying off about 8,000 employees by March 31.

For the nine-month period ended September 30, Sprint Nextel lost $1.18 billion on revenue of $27.2 billion. That compares with a net loss of $128 million on $30.3 billion in revenue for the first nine months of 2007.  (For more, read “Layoffs Coming, and in Large Numbers.”)

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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The recession is leading organizations to slash spending on training, two recent studies show.

Average training expenditures per employee fell 11 percent in the past year, from $1,202 per learner in 2007 to $1,075 per learner in 2008, according to a report issued Friday, January 23, by research firm Bersin & Associates.

Bersin said its figures include training budgets and payroll. Bersin also said the U.S. corporate training market shrank from $58.5 billion in 2007 to $56.2 billion in 2008, the greatest decline in more than 10 years.

Bersin’s report echoes a November study by training services firm Expertus and research provider Training Industry. The survey of 84 corporate and government training professionals found that more than twice as many respondents expect training budget decreases rather than increases for 2009.

Forty-eight percent expect their budgets to decrease in 2009, up from 41 percent in 2008. Only 17 percent expect their budgets to increase in 2009. In addition, since 2008 budgets were first approved, far more saw decreases (38 percent) than increases (11 percent).

Bersin president Josh Bersin said organizations funneled money and staff into traditional and “often nonstrategic” training programs in good years.

“When budgets became tight, organizations with a traditional training focus suffered most,” Bersin said in a statement. “Today’s business world demands a combination of formal and informal learning with an emphasis on collaboration, knowledge sharing, social networking, coaching, and mentoring.”

The new reports confirm the old theory that training is among the first things cut during hard times, which today include a U.S. economy estimated to have contracted by more than 5 percent in the fourth quarter, an unemployment rate that rose to 7.2 percent in December and thousands of job cuts announced daily.

Trimmed training budgets also come amid a broader reassessment of employee development. In recent years, experts have argued that workers increasingly see career development as vital in an employer. At the same time, traditional, formal training in classrooms or through computer coursework has come under fire as less effective compared to less-formal modes of training, including on-the-job learning and the use of social networking tools such as corporate wikis.

Peter Cappelli, management professor at the Wharton School of the University of Pennsylvania, has suggested that employees share in the cost of training. In particular, he argues for tuition assistance programs, in which employees invest their time and effort on classes and class work.

The Expertus-Training Industry report found that return-on-investment and business-impact metrics are not often used to evaluate training programs.

“We recommend that organizations make measuring the value and impact of learning a priority,” Doug Harward, chief executive of Training Industry, said in a statement. “This way, training organizations can make better-informed budgetary decisions about which training should be supported and which training needs to be improved.”

In its 2009 Corporate Learning Factbook, Bersin said it found that companies have changed training program priorities; moved to coaching, informal learning, collaborative activities and other less-costly training methods; and increased reliance on outsourcing.

—Ed  Frauenheim

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A woman who testified in her employer’s internal investigation of a sexual harassment charge is protected against retaliation under a federal civil rights law, the Supreme Court ruled in a unanimous decision Monday, January 26.

The court reversed decisions by a district court and the 6th Circuit Court of Appeals, which held that Vicky Crawford could not sue a local government in Tennessee for dismissing her after she reported the lewd outbursts of a supervisor in a 2002 probe.

The lower courts held that only the subject of the sexual harassment is shielded from retaliation. Crawford was not the employee who brought charges against Gene Hughes, the employee relations director for the Nashville and Davidson County school system.

But Crawford, the payroll director, had run-ins with Hughes, including an incident in which he grabbed Crawford’s head and tried to pull it toward his crotch.

The school district took no action against Hughes. It fired Crawford later for alleged embezzlement. In her suit, Crawford asserted that she was dismissed for reporting Hughes’ behavior.

Supreme Court Justice David Souter, writing for his colleagues, argued that the lower courts erred in ruling that Crawford was not protected because she did not “oppose” Hughes’ harassment, as her colleague who formally filed the charge did. Rather, the courts said Crawford was just answering questions.

Souter wrote that “oppose” was undefined in the Title VII discrimination statute and therefore took on its dictionary meaning of “to resist or … to confront.”

“There is, then, no reason to doubt that a person can ‘oppose’ by responding to someone else’s question just as surely as by provoking the discussion, and nothing in the statute requires a freakish rule protecting an employee who reports discrimination on her own initiative but not one who reports the same discrimination in the same words when her boss asks a question,” Souter wrote.

Some business advocates warned that a ruling in favor of Crawford would crimp internal investigations because companies would be wary of retaliation suits.

Souter dismissed that reasoning. He said that if companies did not respond to harassment allegations with an internal investigation, they would be forfeiting an important defense.

But Louis Britt, a partner at Ford & Harrison in Memphis, said the ruling did leave open the question of whether informal workplace chats are protected.

“There could be a conversation with a supervisor that could provide that [retaliation] protection—even outside of an internal investigation,” Britt said.

A bigger risk is that employees would avoid probes if they feared losing their jobs, according to Souter.

“If it were clear law that an employee who reported discrimination in answering an employer’s questions could be penalized with no remedy, prudent employees would have a good reason to keep quiet about Title VII offenses against themselves or against others,” Souter wrote.

James Burns, a partner at Reed Smith in Chicago, said the decision should not discourage employers from conducting investigations. But they might want to be more careful whom they interview, especially if it’s a poor performer who may be on the way out the door.

The ruling “suggests greater care in planning and carrying out the investigation,” Burns said. “The employer may initially start out with a smaller group of employees who are likely to know something.”

It will be up to HR departments to track internal investigations and make sure that a company avoids talking to employees who are at risk of being fired.

“Now they’re going to have to make sure they connect those dots,” Britt said.

Justice Samuel Alito Jr., in a concurring opinion with Justice Clarence Thomas, made a clarification that employers likely would find helpful. He asserted the court’s ruling in the Crawford case applied just to people who take part in an internal review. It does not extend to people who never directly voiced opposition to the alleged harassment.

“The question whether the opposition clause shields employees who do not communicate their views to their employers through purposive conduct is not before us in this case,” Alito wrote.

In sending the case back to the lower courts, Souter emphasized that the matter is not closed. The school district may still be able to prove that Crawford’s dismissal on the embezzlement charge was justified.

—Mark Schoeff Jr.

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For companies seeking to inspire employees to improve their health or stay well, Sibson Consulting offers “Reaching Employees in the Right Place at the Right Time: Four Steps to Successfully Communicating Your Organization’s Wellness Program.” The article in the company’s October 2008 newsletter, Perspectives, walks managers through four steps, which begin with communication:

• Conduct a communications assessment.

  
  

• Develop a communications strategy.

  
  

• Build employee awareness and create demand.

  
  
• Keep it up with ongoing campaigns.
  
  

  And the writers of the article, Erin Hodges and Randolph Carter, conclude with the opinion that communication is the key: “To facilitate behavior change, organizations need to review how their wellness program is communicated to employees. Without effective communications the best wellness program in the world is not going to succeed.”
  

  
  

Economic stimulus legislation to be considered by the Senate Finance Committee next week would provide temporary federal COBRA health insurance premium subsidies to employees who are laid off.

Under the measure, the federal government would pay 65 percent of COBRA premiums for employees who lose their jobs between September 1, 2008, through December 31, 2009. The subsidy would be available for up to nine months.

The provision is far more limited than the COBRA section of the economic stimulus bill approved Thursday, January 22, by the House Ways and Means Committee. Under that measure, beneficiaries 55 and older and employees who have worked at least 10 years for an employer could retain COBRA coverage until eligible for Medicare. That would be a huge change from current law that allows COBRA coverage for 18 months.

In addition, the Ways and Means Committee bill, which is expected to be considered by the full House next week, would provide a 12-month federal COBRA premium subsidy for those losing their jobs between September 1, 2008, and December 31, 2009.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Employers would have to extend COBRA health care continuation coverage for older employees and longer-service employees until they are eligible for Medicare under legislation approved Thursday, January 22, by a House panel.

The COBRA provisions, tucked into the $825 billion economic stimulus package approved by the Ways and Means Committee, would be a huge expansion of the 1986 law that now gives employees who terminate employment the right to continue health insurance coverage from their former employers for 18 months by paying a premium equal to 102 percent of the cost of coverage provided to employees.

Under the measure, employees who stop working as young as age 55 could keep COBRA coverage until they were eligible for Medicare at age 65, regardless of the amount of time they worked for the employer. And any employee who worked for an employer for at least 10 years also could keep COBRA until eligible for Medicare.

In addition, the legislation, which was approved on a partisan 24-13 vote, would provide employees who are laid off between September 30, 2008, and December 31, 2009, a 65 percent federal COBRA premium subsidy for 12 months.

Committee member Ginny Brown-Waite, R-Florida, spoke in opposition to the expansion, warning that the claims costs of older beneficiaries could be close to double the premium they pay their former employers, adding thousands of dollars in health care costs per beneficiary to employers.

That could lead more employers to drop health insurance coverage, she said.

Business groups said such an expansion of COBRA would change the nature of the program. “The purpose of the COBRA program is not, and should not be, to provide long-term or permanent coverage,” Mark Ugoretz, president of the ERISA Industry Committee, wrote in a letter sent to federal legislators before the panel vote.

The full House is expected to take up the stimulus bill next week.

(For more, read “Obama Asks Workers and Businesses to Serve and Sacrifice.”)

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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