Author: Site Staff

In a long-awaited move, Hewitt Associates has named a new head of its HR outsourcing business.

Jay Rising, who most recently served as president of field operations at RightNow Technologies, will take on his new role as Hewitt’s president of HRO on May 14. Before working at the Bozeman, Montana-based customer relationship management provider, Rising, 50, spent 10 years at ADP. He was unavailable for comment.

Hewitt also announced other senior appointments. The Lincolnshire, Illinois-based company named Robert Thomas, another former ADP executive, to lead client implementations. Steve Fein, a former global managing director of strategy, marketing and product management for Mercer HR’s benefits otusourcing business, has been named sales and product strategy leader, a new position.

Separately, Hewitt named Tracey Keogh, the former global head of HR for Bloomberg, as senior vice president of HR. Keogh replaces Steve King, who is retiring in June.

Observers have been waiting for Hewitt to name a new head of HRO since Bryan Doyle, the former president of HRO business, stepped down in August. Julie Gordon, now president of client and market leadership, had been acting as temporary head of HRO, but experts say that it was time for CEO Russ Fradin, who joined the company in September, to name someone permanently to the position.

“I was just thinking last week that Fradin has had time to learn about the organization and now he needed to do something authoritative,” says Neil McEwen, an analyst at PA Consulting. “It’s good that he is bringing in his own people.”

Fradin also used to work at ADP. The fresh perspective of outsiders may be just what Hewitt needs, McEwen says.

But some analysts were annoyed that Hewitt didn’t make the announcement days before when it was holding meetings at HR Week, which included an HRO event attended by all the providers and analysts.

“Why didn’t they announce going in and give people a chance to meet and talk to the new team?” IDC analyst Lisa Rowan says. “They need to be more open about what’s going on there.”

Hewitt spokeswoman Jennifer Frighetto says the company couldn’t make the announcement earlier because it was bound by disclosure rules.

“Once Jay resigned from his company, they had to go through their formal notification process before we could say anything,” she says.

Hopefully the new appointment will ease the minds of Hewitt employees, as many have been concerned about the future of the HRO business, Yankee Group analyst Jason Corsello says.

Going forward, Hewitt needs to put in place its own talent management and retention strategies to make sure these employees stick around for Hewitt’s comeback in HRO, he says.

“Hewitt isn’t leaving the market,” he says. “HRO is too important a business for it to give up.”

—Jessica Marquez

A bill that seeks to give shareholders more influence in setting compensation levels for corporate executives was approved by the House of Representatives on Friday, April 20, but faces cloudy prospects.

The House passed the bill 269-134, with 55 Republicans joining 214 Democrats in support of the legislation. It was opposed by 129 Republicans and five Democrats.

The bill would allow shareholders to cast an annual nonbinding advisory vote on executive compensation packages. It also would allow a nonbinding vote on “golden parachute” pay arrangements when a company is in negotiations to be bought or sold.

Although it sailed through the House, there is no similar bill percolating in the Senate. In addition, the Bush administration opposes the measure.

Proponents say the legislation addresses what they call runaway executive pay. In recent months, individual CEO compensation totaling hundreds of millions of dollars has generated controversy about the chasm between executive remuneration and that of middle- and lower-level employees.

It also has raised concern about CEO pay consuming resources that could otherwise be used for business investment.

“This is a bill to further the workings of the capitalist system of the United States,” said Rep. Barney Frank, D-Massachusetts and chairman of the House Financial Services Committee, during the House floor debate. “All we say is this: The shareholders own the companies, and we believe the shareholders should be allowed to vote.”

The Bush administration argues that executive pay disclosure rules promulgated by the Securities and Exchange Commission, which went into effect this year, should be given a chance to work. It also says corporate boards and their compensation committees have become more independent.

“Recent enhancements in corporate governance and disclosure have strengthened the executive compensation decision-making process of boards of directors,” the administration said in a statement.

Frank praises the SEC disclosure requirements and says that his bill enhances them.

“The SEC has said that it does not have the power to go further and compel corporations to allow the owners to vote,” he said. “Our bill simply does that.”

Both the White House and House Republicans argue that the bill represents a federal intrusion into the compensation process.

“It mandates, it requires, it obligates every publicly held corporation in this country to take a vote on its top executives,” said Rep. Spencer Bachus, R-Alabama and ranking member of the House Financial Services Committee.

Several Republican amendments were voted down. They included measures that would exempt the shareholder vote requirement for companies whose boards are elected by majority vote and for companies whose executive pay does not exceed by 10 percent or more the pay at comparable firms or across the industry.

Another amendment would have required the SEC to study whether a shareholder vote would hurt a company in recruiting executives.

Republicans tried to avoid being labeled as defenders of burgeoning executive salaries.

“I’m all in favor of the shareholder vote, if it’s done without the mandate from Washington,” said Rep. Tom Price, R-Georgia.

A company in Price’s state, insurer Aflac, has voluntarily instituted shareholder voting on pay.

Frank rejected the idea that the bill would be a burden to corporate America.

“We made an effort to make this bill minimally intrusive,” he said. “The shareholders own the company. They are the market. All this bill does is empower them.”

Democrats also asserted that a shareholder vote on pay would help rein in excesses that infuriate the average employee, whose real wages have generally stagnated or grown slowly.

“The American worker is not getting enough credit for the growth of the American economy,” said Rep. Brad Miller, D-North Carolina.

—Mark Schoeff Jr.

 

A closely watched discrimination case that the Supreme Court had been scheduled to hear April 18 has been withdrawn, leaving unresolved, for the moment, the question of whether a company can be held liable for discrimination by a subordinate supervisor, even if a higher-ranking official makes an employment decision unaware of the alleged bias.

BCI Coca-Cola Bottling v. EEOC was supposed to be argued before the high court last week. On April 12, however, BCI asked the court to dismiss the case, even though it has not reached an agreement with the Equal Employment Opportunity Commission, which is suing BCI on behalf of an employee at the company’s Albuquerque, New Mex­ico, operation. The action will be re­manded to district court in New Mexico.

The employee, Stephen Peters, was dismissed in 2001 after failing to work on a special promotional weekend. His supervisor, Cesar Grado, told the human resources department in Phoenix that Peters had been insubordinate, but he did not recommend termination. Peters was fired by an HR manager after she reviewed Peters’ file.

Peters sued, alleging that Grado was racially biased. The HR office did not know that Peters was African American.

The trial court ruled against Peters on summary judgment, saying he didn’t prove that Grado’s alleged discrimination influenced an employment decision made at a higher level of the company. The 10th Circuit Court of Appeals, however, found that Peters should get a trial. And now that the case has been removed from the Supreme Court’s docket, that’s what will happen.

“The withdrawal of this case represents a real loss to the employer community, the HR profession and to employees, because we missed an opportunity for the Supreme Court to clarify what has clearly been a debate amongst the appellate circuits around the country,” says Manesh Rath, a partner at Keller and Heckman in Washington.

Observers point out that there are two similar cases in the Supreme Court pipe­line, one involving a white professor being denied tenure at a historically black college.

“If they’re inclined to look at this issue of law, they can do it,” says Michael Foreman, deputy director of legal programs for the Lawyers’ Committee for Civil Rights Under Law.

When the court weighs in on the controversy, it could have a profound impact on discrimination cases.

If the Supreme Court adopts the 10th Circuit stance, it will “short-circuit the plaintiff burden” because someone alleging discrimination would not have to prove that the person making the decision was biased, Rath says.

“That’s a change in what the plaintiff had to prove for 35 years,” he says.

If the Supreme Court takes a position similar to the one outlined in the summary judgment, it would allow employers to create “a structure of plausible deniability” to avoid complying with anti-discrimination statutes, Foreman says.

“It would dramatically undermine the purposes of Title VII,” he says.

Foreman asserts that if ra­cism contributes to adverse employment impact, it doesn’t matter where the bias occurs within the company hierarchy. The point is to eradicate it everywhere.

“We want it out of the employment decision,” Foreman says.

But Rath says those decisions can be made free of discrimination by someone in the HR office, who may not know that bias existed somewhere else in the organization.

“These things don’t come to light except through the microscopic scrutiny of litigation,” Rath says.

Mark Schoeff Jr., Workforce Management staff writer

Union support for a Florida bill that would allow employees to keep guns locked in their cars on company grounds may mean troubling times for employers.

At a Florida Senate committee hearing March 27, the Florida AFL-CIO came out in support of the bill, which is sponsored by the National Rifle Association.

The issue of firearms in workplace is likely to become a hot issue nationwide in light of the recent shootings at Virginia Tech. Among the 33 dead were at least seven university employees.

For the union, “guns are not the issue,” AFL-CIO spokesman Rich Templin says.

“This is about protecting workers’ rights. When you drive to work, your car still belongs to you. Your privacy doesn’t end when you get to work.”

SB 2356, which was introduced earlier this year, would let employees keep “any legal personal property” locked in their cars, even on company property. Employers or other entities could not prohibit them from having such items in their vehicles.

Similar bills are pending in Texas and Georgia as the NRA tries to pass legislation throughout the country, observers say.

And if the unions choose to support these measures in other parts of the country, employers will have to address the issue, says Mark Neuberger, a labor lawyer at Buchanan Ingersoll in Miami.

“Employers are already fighting this to protect the security of their workplaces,” he says. “But now this could become a bargaining issue with the union.”

So far there hasn’t been any indication that the AFL-CIO will support bills in other states, but it’s not out of the question, says Al McKenna, a partner in the Orlando office of employment law firm Ford & Harrison.

“It’s a way to cozy up to potential new members,” he says. However, he notes that the unions are busy right now with more pressing matters. “It could create pressure if the AFL-CIO decides to invest resources into the support of this law,” McKenna says, “but this isn’t like the Employee Free Choice Act,” the bill that would authorize a union when a majority of employees sign cards approving collective bargaining. The bill is a top priority of organized labor.

In Florida at least, the AFL-CIO’s support of the bill has caused employers some concern. The Florida Chamber of Commerce and others have strongly opposed the bill, arguing that it violates their property rights.

“Our principal concern is that this bill is somewhere between an attack on the employer/employee contract and on property rights overall,” says Mark Wilson, executive director of the Florida Chamber of Commerce.

Many were shocked to learn of the AFL-CIO’s support for the bill.

“As the first people in line to be shot in a workplace incident, it seems pretty ludicrous that a union organization would support arming workers,” says Brian Sie­bel, a senior attorney at the Brady Campaign to Prevent Gun Violence.

But Templin emphasizes that for the AFL-CIO, this is an issue of protecting workers’ rights.

“As soon as someone takes the gun out of their vehicle or makes a threat, the law addresses that,” he says. “This is about protecting workers’ rights to keep things in their cars.”

Templin notes that there have been incidents where members have been fired for having union materials in their cars, and this law would prevent such incidents.

To support the bill, the AFL-CIO in Florida is sending out e-mails to its 500,000 members encouraging them to call their senators in support of the bill, Templin says.

Wilson says he’s surprised that HR managers haven’t gotten more involved in the discussions about the bill. While the Society for Human Resource Management testified in front of the Senate Criminal Justice Committee against the bill and has sent information to their members, Wilson says that “we were hoping there would be more calls from HR managers.”

On April 10, the Senate Judiciary Committee voted 8-3 to approve the bill, which is now pending vote on the chamber floor. The House is also considering a similar bill.

Jessica Marquez

Tools and Resources for Dealing with Workplace Violence

In light of Monday’s shooting rampage at Virginia Tech, Workforce Management has assembled the following list of resources related to workplace violence. The shooting at Virginia Polytechnic Institute and State University killed 33 people, including at least seven university employees.

Useful Information on Workplace Violence and Strategies for Prevention and Response.

Workplace Violence Prevention and Response Policy

Points to Cover in a Workplace Violence Policy

10 Tips on Recognizing and Minimizing Violence

Develop a Workplace Violence Program for Every Site

Preventing Violence: An Organizational Self-Assessment

Emergency Planning and Crisis Management

What to Do in a Catastrophe

Crafting the Crisis Communication Message

Dear Workforce: We Have a Longtime Employee with a History of Belligerence. Is It Too Late to Reverse His Behavior?

Enjoy these photos from Workforce Management’s inaugural Talent Management Conference, featuring the 17th annual Optimas Awards held March 27, 2007 at the Millennium Broadway Hotel in New York. Click here for more information on our winners and the Workforce Management Optimas Awards.
	FINANCIAL IMPACT WINNER GM Service Technical College Kevin Walter, Deputy Training Center Manager
COMPETITIVE ADVANTAGE Edwards ifesciencesRobert Reindl, Corporate Vice President, Human Resources
	ETHICAL PRACTICE Putnam InvestmentsRichard Tibbetts, Chief of Human Resources
GLOBAL OUTLOOK Infosys TechnologiesTandy Harris, Head of Human Resources, North America
	INNOVATION Best Buy/CultureRxJody Thompson and Cali Ressler, CultureRX Founders
MANAGING CHANGE Luxottica RetailRobin Wilson, Senior Director, Human Resources Workforce Management.
	PARTNERSHIP CVSSteve Wing, Director of Government Programs
SERVICE U.S. Office of Personnel ManagementNorman Enger, Director, HR Line of Business
	VISION Sun Healthcare GroupKay Weiss, Workforce Development Manager
GENERAL EXCELLENCE Goldman Sachs & Co.Carol Pledger, Managing Director, Goldman Sachs University
	Dennis Donovan introducing himself to Robin Wilson, Luxottica Retail, Senior Director, Human Resources
Supporting Sponsor, Pat Rohe, Chairman, ASA
	Dennis Donovan, Building a Winning Future on a Foundation of Change
Dave Ulrich, Partner and Co-Founder, The RBL Group; AuthorThe Talent Equation: Competence, Commitment and Contribution
	Dave Ulrich
Beverly Kaye, Founder and CEO, Career Systems International; AuthorLove ‘Em or Lose ‘Em: The Leader’s Role in Retention and Engagement
	Ken Carrig, Executive Vice President & Chief Administrative Officer, Sysco CorporationTalent Management Tales.
John Hollon, Editor, Workforce ManagementMaster of Ceremonies
	From left to right back row: Jason Asch, National Sales Manager, Workforce Management John Hollon, Editor, Workforce Management Todd Johnson, Publisher, Workforce Management Tonya Adams, Marketing Manager, Workforce Management Karin Kinnear, Assistant Circulation Manager, Workforce ManagementCarroll Lachnit, Executive Editor, Workforce Management Bottom row:Kari Carlson, Southeastern Sales Manager, Workforce Management Supporting Sponsor, Pat Rohe, Chairman, ASA Bob Dortch, General Manager, Online, Workforce Management Daniella Weinberg, Northeast Sales Manager, Workforce Management
A special thank you to our Supporting Sponsor, ASA
It’s an extraordinary day, and the best way to attend is to win! VisitWorkforce.com to learn more about the Awards, and how to nominate your company’s achievements!

On the day after the worst shooting rampage in U.S. history at Virginia Tech University, Sen. Patty Murray, D-Washington, introduced legislation that would address violence in another sometimes volatile location—the workplace.

Murray’s bill, the Survivors’ Empowerment and Economic Security Act, would allow 30 days of leave for victims of domestic violence in the workplace so that they can appear in court, seek legal assistance and secure their homes and families.

The measure also would give abuse victims access to unemployment insurance if they have to leave their jobs and prohibit employment and insurance discrimination based on a victim’s history of abuse.

Murray announced the bill at a Tuesday, April 17, hearing of the Senate Health, Education, Labor and Pensions Subcommittee on Employment and Workplace Safety. Murray, chairwoman of the panel, asserted that it was the first Senate hearing on domestic violence in the workplace in five years. It was scheduled in advance of the Virginia Tech shootings.

But the campus tragedy framed the Capitol Hill meeting.

“So many families will never be the same,” Murray said in her opening statement. “Their loss hangs over everything we’re doing in the Senate today and will for a very long time. We need to do everything we can here in Congress to save lives and prevent violence from reaching into our schools, homes and workplaces.”

Although each witness at the hearing agreed that office violence should be prevented, an employment lawyer representing the Society for Human Resource Management cautioned against assuming that employers are not doing enough to prevent workplace tragedies.

“Overall, I find employers extremely compassionate about these situations,” said Sue Willman, a lawyer with Spencer Fane Britt & Browne in Kansas City.

Willman, a victim of domestic violence and a certified HR professional, argued the leave mandate contained in previous versions of Murray’s bill might force companies to reduce the time off they already provide in order to comply with the law. Murray had not circulated her new legislation before the hearing.

In addition, Willman said that victim leave must be coordinated with the Family and Medical Leave Act and the Americans With Disabilities Act and warned that, under Murray’s plan, employers might be forced to risk other employees’ safety to protect victims.

“Employers understand that there is no one-size-fits-all approach when domestic violence finds its way into the workplace,” Willman says.

Sen. Johnny Isakson, R-Georgia and ranking member of the subcommittee, shared Willman’s apprehension. He praised Murray for holding the hearing and introducing her bill.

But he has misgivings about unintended consequences of the legislation, such as increasing discrimination against abuse victims and fostering litigation. He says most employers are trying to prevent violence.

If the legislation is written assuming that employers are mostly at fault, it will go in a different direction from a bill that targets employers that have failed to protect victims.

“The presumptive basis of legislation is critical,” Isakson says. “For most companies that stay in business, the HR element is important and their concerns about employees are pre-eminent.”

One victim of domestic violence at work, however, told the panel her harrowing story—and asserted that her employer didn’t help her.

Yvette Cade’s estranged husband attacked her while she was working at a T-Mobile store in suburban Washington, D.C., on October 10, 2005. He doused her with gasoline, chased her from the facility to the parking lot, crushed her foot and set her on fire. The incident occurred a few weeks after a judge declined to place a restraining order on the man.

“I felt my skin dripping,” Cade testified. “I was just like a great ball of fire.”

Although Cade was a top saleswoman, she says the store management didn’t help her before the attack—and didn’t call the police when it occurred. A friend of hers dialed 911.

That was symbolic of the store’s previous blasé attitude.

“My problem was my manager not taking me seriously enough and acknowledging there was a problem,” Cade says. “I survived to tell the story of what happened to me in hopes that things could be different for other victims.”

An expert who testified before the committee argued that employers need to be prodded to develop anti-violence and victim-support policies. Kathy Rodgers, president of Legal Momentum, noted that only 4 percent of companies have programs in place.

She says that the “linchpins” of good policy are rules that prevent the firing of abuse victims, grant leave to them and provide unemployment if they have to relinquish their jobs because of their abuse.

“Very few [companies] have all the pieces in place,” Rodgers says. “They need to be thinking more about them and providing solutions.”

A voluntary program “leaves the burden with the victim to always come forward.”

Government intervention seems to be accepted in Maine, where a workplace domestic violence law was instituted two years ago. The measure provides unpaid leave for victims.

“We’ve had very few complaints from employers about enforcing this,” says Laura Fortman, commissioner of the Maine Department of Labor. Proposing and implementing the law “allowed a concentrated effort to bring this issue into the workplace. It allowed us to … really include employers in that conversation.”

Murray wants to broaden the dialogue beyond companies to schools and other dimensions of society.

“Do we still in this country see domestic violence as domestic violence and not as a community responsibility?” she asked the witness.

Mark Schoeff Jr.

Barry Stokes, the self-styled “Consumer-Driven Guy” whose company reportedly administered 14,000 health savings accounts totaling $8.7 million, sits in jail awaiting the start of a criminal trial May 22 in which he is charged with embezzling money from his former clients.

In what is likely the first prosecution of HSA fraud, the case exemplifies the caution benefits administrators must exercise when hiring third-party administrators to manage health care assets.

Stokes’ firm, 1Point Solutions, was based in the Nashville, Tennessee, area before it went bankrupt last fall. It administered at least $24 million, mainly in 401(k) plans but also in HSAs, health reimbursement arrangements and flexible spending accounts for 35,000 plan participants, says John McLemore, the court-appointed bankruptcy trustee. McLemore has set up a blog that updates the progress of the bankruptcy and related court actions.

Until last fall, employers who had health care-related accounts with 1Point had little reason to be suspicious. Clients of 1Point say the administrator regularly sent statements to members who were contributing money from their paychecks to their various accounts. For the most part, customers who used debit cards to pay for medical services out of their flexible spending accounts had money in their accounts.

Susan Smith, the executive director of the TML Intergovernmental Employee Benefits Pool, which is the benefits administrator for approximately 600 cities and other local governments in Texas, met Stokes several years ago. She says he came across as a sincere, smooth-talking advocate of health care consumerism.

He had a Web site, consumerdrivenguy.com, and issued press releases commenting on what he called “the health care revolution.”

When Stokes won the business of TML’s 15,000 members, Smith believed Stokes when he said the assets would be deposited with Mellon Bank.

“We never really asked him to prove it to us,” Smith says. “We never had trouble accessing the funds. … When he said that’s how he had it set up, we just believed him. But obviously that did not happen.”

Smith says she saw few warning signs of a pending implosion except when a few members complained in September that checks they had written from their flexible spending accounts had bounced.

Around that time, an auto parts maker, Beck/Arnley Worldparts, based in Smyrna, Tennessee, decided to switch plan administrators for its 401(k) plans. When the company was unable to get its assets, it sued.

The auto parts maker got a phone call from Stokes’ attorney on September 8, saying the money in the plan was “gone and likely unrecoverable,” according to a complaint filed in September in U.S. District Court in Nashville.

A judge quickly declared the company bankrupt, and soon other clients began asking questions. A federal grand jury in the Middle District of Tennessee indicted Stokes in November for allegedly stealing more than $210,000 from the retirement funds he administered.

McLemore says Stokes was “robbing Peter to pay Paul. And it worked right up till the end.”

When the news came out, Smith’s phone “didn’t stop ringing. Everyone was in a tailspin.”

“People here were in panic mode calling each other and asking what was going to happen” to their money, she says.

TML lost half a million dollars, Smith says, and eventually paid its members back by dipping into its own funds. The group is now one of more than a thousand creditors seeking to get their money back from 1Point.

“It was definitely not a fun learning experience,” Smith says, “especially with health care costing so much today.”

Of the many lessons learned, one is that money left with third-party administrators is not protected by the Federal Deposit Insurance Corp.

A lot of people thought the plans themselves were FDIC protected. “That, of course, is a complete illusion,” McLemore says.

Unlike health reimbursement arrangements and flexible spending accounts, money for health savings accounts must be held by an FDIC-insured bank, thus giving account holders some security, says TML’s legal counsel, Scott Wilson. However, as TML found out, employers must make sure that funds are actually deposited in a bank.

Stokes may have used his clients’ money, in part, to purchase a vast collection of Japanese woodblock prints. Creditors hope those will fetch as much as $1 million on the auction block.

That payout, however, will do little to restore what is owed. At a November court meeting in Nashville, at which Stokes appeared in shackles, creditors were told they would probably see between 5 cents and 50 cents on each dollar owed.

TML is now administering its members’ assets and realizing that they are able to do it for roughly the same amount it cost the group to hire 1Point.

If they decide to work with a third-party administrator again, Wilson says they will be much more diligent. “We want to see everything from their lawyers.”

But, Smith adds, the group did meet with the company’s lawyers. “We met with everybody,” she says. “It happened like he promised until we woke up and he absconded with our money. Until then there were not a lot of signs that it wasn’t working right.”

Jeremy Smerd

General Motors’ Lordstown, Ohio, assembly plant has become the test site for a companywide cost-cutting effort that could save hundreds of millions of dollars a year.

As part of an ambitious productivity strategy dubbed “True North,” GM is asking local United Auto Workers leaders at all plants to consider a variety of once-taboo efficiency measures.

In late February, GM opened negotiations with Lordstown’s union officials. GM wants the union to accept nonunion janitors, work 10-hour shifts without overtime pay, allow nonunion workers to replenish parts bins and let nonunion truckers deliver and unload parts shipments.

The unstated threat: If the workers reject GM’s proposals, production of the automaker’s 2009 Cobalt model might move to Mexico.

If the union allows it, True North could generate big savings. According to a source, the companywide use of nonunion janitors—who would earn about $12 per hour instead of $28 per hour—alone could save GM $300 million to $500 million a year.

Each UAW GM local would have to negotiate its own deal, but sources say the Lordstown talks could become an important precedent. Says a source close to GM, “The changes you see in Lordstown could foreshadow what you see in the rest of GM’s contracts.”

Traditionally, local union leaders negotiate each plant’s work rules in the same year the UAW bargains new labor contracts with GM, Ford Motor Co. and the Chrysler Group.

The national negotiations, which cover wages and benefits, get all the media attention. But local work rules have a big effect on each plant’s productivity. And this year Detroit’s Big 3 is demanding unprecedented concessions.

“There’s a lot of negotiating going on right now—not just at GM, but Ford and Chrysler as well,” says Laurie Harbour-Felax, a manufacturing consultant who is president of Harbour-Felax Group in suburban Detroit. “They need to get their … labor agreements to be as competitive as possible.”

A similar plant-by-plant cost-cutting program launched last year by Ford could generate more than $600 million in annual savings. An agreement signed last year at just one plant—Ford’s Rouge assembly plant in Dearborn, Michigan—will save $100 million a year.

A GM source confirmed True North’s existence, but declined to give an on-the-record interview. Lordstown appears to be a test site in part because it produces small cars—a product segment that has not been profitable for the Detroit automakers.

UAW Local 1112, which represents about 2,600 workers at the Lordstown assembly plant, already has accepted some changes on behalf of some members who make headliners for Lear Corp. The Lear workers accepted a five-year pay freeze and eased work rules, and agreed to $12 weekly benefit co-pays.

Those workers also agreed that skilled-trades workers would assume additional duties, such as sweeping the floors, without any change in pay.

But Rich Rankin, Local 1112’s Lear shop chairman, says he still is worried that Lordstown might lose the next-generation Cobalt.

“Everybody is very nervous and on edge,” Rankin says. “We’re just fed up. We keep giving and giving with no guarantees.”

Other plants face similar cuts. At the Fairfax assembly plant in Kansas City, Kansas, GM’s cost-cutting target is $54 million.

GM wants to shift about 20 percent of the work now performed by UAW members to outside contractors, says Jeff Manning, president of UAW Local 31. That would affect about 500 of the plant’s 2,500 union jobs, he said.

Outside workers would assemble doors, wheels and engines. Outsiders also would operate forklifts and handle janitorial jobs.

In exchange for the loss of those high-paying jobs, Fairfax would get a shot at a replacement vehicle when the plant stops producing the Chevrolet Malibu and Malibu Maxx and Saturn Aura in 2011.

Manning says the rank and file might not approve True North unless GM management shares the financial sacrifice. “It’s going to be tough,” he says. “It’d be far easier if management shared in the $54 million.”

GM has been cagey about its future plans for each assembly plant. Even if workers at Fairfax and Lordstown embrace True North, GM is not guaranteeing that those plants will stay open, union officials say.

GM has not threatened to shut Lordstown if the plant’s hourly workers refuse to budge. But UAW leaders know they’re in a predicament.

“They’re asking us to come up with these new work rules, but with no guarantee of a product,” says Dave Green, president of UAW 1714, which represents Lordstown’s stamping plant. “That’s one of the sticking points. Everybody is on pins and needles.”

Filed by Jamie LaReau and Dave Barkholz of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Legislation signed by Virginia Gov. Tim Kaine will require group health insurance policies sold by commercial insurers to continue coverage for up to one year for dependent children under age 25 who can’t continue as full-time students because of a medical condition.

Under the new law, which will take effect July 1, coverage in such situations would remain in force for up to 12 months from the date a dependent child ceased to be a full-time student or attained age 25, whichever occurs first.

The measure is part of a trend by states to find ways to enable employees’ dependents to retain group coverage for a longer period of time, reducing the likelihood that the individuals will become uninsured.

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

A last-ditch effort to extend the life of America’s Job Bank seems unlikely to succeed.

Earlier this year, a group of state administrators appealed to congressional leaders to keep the free online job site from shutting down in June. But the group’s executive director doubts Congress will heed the call.

In February, the National Association of State Workforce Agencies sent letters to Sen. Tom Harkin, D-Iowa, and Rep. David Obey, D-Wisconsin, asking for continued funding for America’s Job Bank “until a new system is implemented.”

“NASWA believes Congress should provide a ‘line item’ of $6 million for continuing AJB in a supplemental appropriation for another year starting July 1, 2007,” NASWA president Roosevelt Halley wrote in the letter.

But Rich Hobbie, NASWA’s executive director, has little hope at this point. He says the best chance for the additional $6 million was getting the request included in a military appropriations bill. But neither the House nor Senate version of the bill—both of which sparked controversy because of timetables for withdrawing troops from Iraq—include the America’s Job Bank funding, Hobbie says.

“It appears unlikely now,” he says.

Harkin did not immediately return a call requesting comment. An aide to Obey did not return a call seeking comment.

NASWA is a group of state administrators of programs and services provided through publicly funded state workforce systems.

America’s Job Bank dates to 1995, and the free site currently lists more than 2.1 million jobs and nearly 650,000 résumés. Last year, the Labor Department said it planned to phase out America’s Job Bank, arguing that maintaining and improving the site no longer makes sense “given that AJB duplicates what is already available in the private sector.”

But the decision to shutter the site has raised a number of questions, including how companies will meet compliance needs. There’s also concern about possible harm to smaller employers and lower-skilled job seekers.

At least two organizations have announced services intended to replace America’s Job Bank. One is NaviSite, a for-profit company that has operated America’s Job Bank for years as a contractor. Another is the DirectEmployers Association, a nonprofit consortium of companies.

The association’s site, dubbed JobCentral National Labor Exchange, won an endorsement in late March from NASWA. Hobbie said NASWA will play a role in governing the exchange, along with the DirectEmployers Association and participating states.

—Ed Frauenheim