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Troubled auto parts supplier Delphi Corp. said Monday, August 18, that it will lay off 600 of the 3,200 salaried workers in its electronics and safety division by the end of this year.

Delphi, which has been operating under Chapter 11 bankruptcy protection since October 2005, plans to cut its electronics and safety division costs by 25 percent.

The division accounted for $5.03 billion, or about 22 percent, of Delphi’s total global sales in 2007.

In a statement, Jeff Owens, the division’s president, said Delphi is “aligning its resources with the dramatic shifts that have occurred in the North American vehicle market.”

“Consumer trends and market conditions have caused fundamental shifts in consumer preferences, impacting both the volume and mix of vehicles produced by our North American customers.”

The affected salaried workers will be notified by August 29, said Delphi spokesman Milton Beach.

Most of the cuts will occur at Delphi’s operations in Kokomo, Indiana, where 2,500 of the 3,200 white-collar employees in the division work. Beach said the company will not disclose a target number of layoffs for each location.

The rest of the workers in the electronics and safety division are in Vandalia, Ohio; Milwaukee; and Michigan.

The layoffs affect about 6 percent of Delphi’s 10,200 salaried workers.

Delphi this month reported a $551 million second-quarter loss on a 13.3 percent decline in revenue. Delphi, a former General Motors subsidiary, relies on GM for most of its business.

Delphi, of suburban Detroit, supplies steering, chassis, electrical and other components and in-vehicle entertainment systems.

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

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They will relearn how to pick up screws. They will study safety practices. They will take classes on workplace diversity and ethics, study corporate history, clean up the mess of urban vandals and probably even plant flowers.

But one thing Toyota’s 4,500 idle North American workers will not do is get laid off.

As the U.S. auto industry sheds workers, and even Nissan offers buyouts, Toyota is sticking by its proud—and expensive—tradition of no layoffs during hard times.

“This was the first chance we’ve really had to live out our values,” says Latondra Newton, general manager of Toyota’s Team Member Development Center in Erlanger, Kentucky. “We’re not just keeping people on the payroll because we’re nice. At the end of all this, our hope is that we’ll end up with a more skilled North American workforce.”

On August 8, Toyota halted production of Tundra pickups and Sequoia SUVs at plants in San Antonio and Princeton, Indiana, for three months, idling 4,500 workers.

It’s an expensive proposition. Toyota won’t estimate the financial hit. But keeping 4,500 of its workers on the clock at full pay and benefits for 14 weeks, even at a conservative estimate of $20 an hour, would represent at least $50 million. The shutdown also means a production loss of 30,000 to 40,000 big-ticket pickups and SUVs. At an estimated wholesale value of even $25,000 per vehicle, that translates into as much as $1 billion in lost revenue.

Other complications are developing. Toyota’s assembly plants that still are producing are leery of others getting an advantage in intra-company competition for future work. So they are vying to take part in the retraining programs.

It was Newton who first received word of Toyota’s decision last month that assembly lines in San Antonio and Princeton would stop making Tundras and Sequoias. Her instructions were clear: All affected workers would remain on the clock at full pay until assembly resumes in November.

No one had developed a contingency plan, so that left Newton and her Kentucky staff with about two weeks of late-night meetings and weekend scrambling to create a plan of action.

Their solution: Move the affected workforce through a nonstop schedule of classes and training exercises aimed at improving their assembly skill levels.

Among the classes they are rotating through: safety drills, productivity improvement exercises, presentations on material handling and workplace hazards, diversity and ethics classes, maintenance education and a stream of online tests to measure and record their skill improvements.

But just as the plan got under way, things became more complicated.

In Toyota’s manufacturing system, its plants compete for each new vehicle program based on their achievements. If one plant gets a leg up on worker skill levels or safety achievements, it could sway a future decision on where a new vehicle gets manufactured.

“Our other North American plants that were not affected didn’t want to get left behind by the skill improvements, so they have asked if they could also participate in the programs,” Newton says.

Rotating the unaffected workers through skill programs will create manpower issues on Toyota’s busier assembly lines. That likely will mean that Toyota will use San Antonio and Princeton workers to relieve employees on lines elsewhere.

The automaker also is considering ways to shift Texas and Indiana workers temporarily to Toyota plants in which assembly lines are moving at full speed, such as the Camry assembly plant in Georgetown, Kentucky.

Despite Toyota’s contingencies, it is unclear that the large-scale retraining will be enough to see the San Antonio and Indiana workers through until production resumes.

The automaker says it has not decided what employees will do after completing their classes, but they probably will work in community service programs around San Antonio and southern Indiana.

That would put Toyota employees to work cleaning public parks and scrubbing graffiti from buildings around San Antonio, a company spokesman says.

And if executives can resolve logistics and safety issues, they may authorize a weeklong employee assignment to clean up the shoreline of a Texas lake.

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

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General Motors’ decision last month to eliminate retiree health benefits highlights the growing role that outside advisors will play as employers divest themselves of retiree health care obligations

Stepping into the employer’s role as health care advisors are companies like Extend Health, which GM hired last month to help retirees purchase health coverage on their own.

Beginning January 1, salaried GM retirees or their dependents 65 and older will no longer receive health benefits. Like Ford Motor Co. and Chrysler before it, GM will be involved in retirees’ health care via a monthly contribution meant to help cover the cost of health insurance. GM will contribute an additional $300 a month to retirees’ pensions to help defray the cost of health plans that supplement Medicare.

Ford, which dropped group coverage in favor of an annual $1,800 per-employee contribution into a health reimbursement arrangement, also hired Salt Lake City-based Extend Health.The company, which is charging GM a one-time $8 fee per member, advises retirees on finding a health plan that suits their needs and budget.

Extend Health says it can compare the prices of 40 health insurance carriers. The company receives a commission from the health insurance company whose insurance product is chosen by a retiree, but Brian Tenner, senior vice president of sales at Extend Health, says agents provide unbiased advice because they are not told about the value of each plan’s commission.

“It’s truly about being an objective advocate for each one of these participants,” Tenner says.Extend Health will work with GM retirees beginning in mid-October, when carriers announce their prices. GM’s announcement has already sent retirees looking for insurance in the individual health care market.

For 27 years as a parts designer at GM and then in the years since he retired in 1993, Stanley G. Howey never had to worry about the cost of health insurance.

Over the years, premiums increased along with co-pays. But even with a triple bypass this year and a planned hip replacement this fall, the monthly medical bill for Howey and his wife totaled $152—including prescription, dental and eye care.

Having spoken with several health benefits advisors, he expects to pay more than $500 a month, not including dental or hearing coverage.

“I’m 72 years old,” says Howey, who lives in Mount Pleasant, Michigan. “I don’t need this stress in my life.”

One company providing advice to Howey is Washington, D.C.-based Lon¬gevity Alliance, which helps people purchase health coverage and plan their retirement finances.

“One way or another, people are moving from the group market to the individual market,” says chief executive Steve Zaleznick. “People need to work through the decisions they need to make now that they’ve suddenly become the purchaser of the product.”

GM spokeswoman Michelle Bunker says Extend Health will help clear up common misunderstandings. She says GM has received numerous calls from retirees worried that pre-existing medical conditions won’t be covered. Such conditions will be included, she says.

“It’s a huge change,” Bunker says. “We understand that.”

The change and its added cost aren’t a surprise to some.

Gustave Joly, whose wife, Helen, worked as a data processor at the Cadillac division in Detroit for 29 years, says the couple “lost their shirt in the stock market,” first when parts maker Delphi filed for bankruptcy and now with their GM stock at record lows.

Joly, 72, has been speaking with brokers to get a sense of how much his health care costs will increase. He understands that as a retiree, he’s a vulnerable cost target for a company trying to stay afloat.

“They took care of us all this time,” he says. “You can’t just say they’re rotten at the core.”

—Jeremy Smerd

New York City’s unemployment rate fell last month with the addition of several thousand jobs, a sign that New York is fairing better than the rest of the nation, but by a limited measure.

The seasonally adjusted unemployment rate, which only accounts for those actively seeking work, dropped to 5 percent in July from 5.4 percent in June and 5.3 percent in July 2007, according to the state Department of Labor. Last month’s adjusted rate for the city was 0.7 percentage points lower than the national rate.

But the number of people collecting unemployment in the city has risen.

Despite the adjusted rate, “total unemployment has been trending upward across the board,” said Jim Brown, a state Department of Labor economist. “We’re still seeing continued weakening in the local and national economies.”

The number of people collecting unemployment throughout the five boroughs, a figure considered by many economists to give a more complete picture of the economy’s health, totaled 70,700 in July. That number is up 17 percent from 60,500 in both June 2008 and July 2007, Brown said.

Unemployment payouts usually go up in July with expected layoffs among teachers’ aides, school bus drivers and workers in several manufacturing industries, but this increase is bigger than usual, he said.

Last month, the total number of New Yorkers not working was augmented by 2,200 layoffs in the city’s financial industry, according to a report released Thursday, August 14, by Eastern Consolidated, a real estate investment firm.

But unexpected growth in other sectors, such as 1,400 jobs in construction and 3,800 jobs in the tourism industry, eased the city’s unemployment rate. More than 6,000 jobs were added in the city in July, according to the report.

“The city has been performing better than the nation in terms of employment and job creation, and it continues to do that,” said Frank Braconi, chief economist for the New York City Comptroller’s Office. “But we also have to remember that these numbers are subject to large revisions, which might bring about a sadder story.”

July’s decline in unemployment could be an anomaly, noted Kenneth Goldstein, a labor economist at the Conference Board. He projects that the city’s unemployment rate is likely to rise again over the next six to 12 months.

“The New York City job market has been affected by the same forces as the rest of the country, except that when the dollar was weak, Europeans were all over Manhattan spending money,” he said. “That premium package is losing steam as the dollar improves and Wall Street continues to struggle.”

Filed by Damian Ghigliotty of Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Massachusetts Gov. Deval Patrick’s administration has issued a regulation that would tighten the rules employers in the state must meet to avoid paying an assessment to the state to help provide coverage to the uninsured.

The current “fair share” contribution regulation is part of the state’s 2006 health care reform law that created a nearly universal health system in Massachusetts. The current regulation requires businesses with at least 11 full-time employees to pay a penalty if they don’t fulfill one of two requirements.

To avoid paying the $295 per-employee assessment, employers must either ensure that at least 25 percent of their full-time workforce is enrolled in their group health insurance plans or they must pay 33 percent of the premium for individual coverage for employees within 90 days of their starting work.

The proposed regulation, however, would require employers to meet both requirements to avoid the assessment. If adopted, the assessments would generate an estimated $45 million in revenue in fiscal year 2009, according to documents from the Massachusetts Division of Health Care Finance and Policy. Currently, the assessments draw about $7 million in revenue, a spokeswoman from the governor’s office said.

That revenue goes toward funding the Commonwealth Care program, which subsidizes health insurance premiums for about 175,000 previously uninsured lower-income state residents.

Employer groups had previously expressed concerns about such a change in the rules, which they say will impose a hefty financial assessment on employers, such as many retailers, that have long waiting periods before new employees are eligible for health coverage. Under current rules, many such companies are exempt from the penalty.

The regulations would go into effect October 1. A public hearing on the issue is scheduled for September 5.

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

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General Motors Corp. has launched a dependent health care audit of its 80,700 hourly workers and 345,000 retirees in an effort to reduce the more than $4.6 billion it spent on health care last year, said Michelle Bunker, a GM spokeswoman.

Bunker said the audit, which is being conducted by Highland Park, Michigan-based Budco, a benefits communications and dependent database developer, will run through 2009’s first quarter.

Initially, she said, workers and retirees would have the opportunity to self-report ineligible dependents, who will be removed from GM’s health care rolls with no repercussions.

In a second phase, to be launched this fall, employees and retirees will be asked to provide documentation—such as a tax return or school transcript—proving that their dependents are eligible for coverage. Employees may be asked to compensate GM for coverage for ineligible dependents discovered in this second phase, the spokeswoman said.

Bunker said the Detroit-based automaker has just finished an audit of its 36,600 active salaried employees and 97,400 retirees, and found the majority of ineligible dependents “were children who have aged out because they are no longer attending school.”

She declined to provide more details of that audit’s results.

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

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Chris Jurney loves his job as a senior programmer of video games with Relic Entertainment. So when he moved from Vancouver, British Columbia, to Philadelphia because of his wife’s work, he was worried that he might not be able to return to his job.

But after a stint at a sister company, Jurney was thrilled that his bosses at Relic said he could come back to work for them and telecommute from his home in Philadelphia. But as many teleworkers soon realize, working from home can quickly lose its appeal.

“I was going totally stir crazy,” Jurney says.

The 31-year-old pitched a new idea to his boss. He found a place called Independents Hall just 30 minutes from his home, where he could share office space, have his own desk, free Internet, a conference room and all the coffee he could drink for $275 a month.

Relic agreed to foot the bill in order to keep Jurney productive and happy, says Tarrnie Williams, general manager at the company.

“Chris had worked with us for a number of years, and in the video game industry it’s really hard to find truly excellent senior talent,” Williams says.

Co-working spaces have been around for a long time, but traditionally they have been the domain of entrepreneurs and freelancers. However, owners of co-working spaces say they are seeing more corporate teleworkers coming in, and in more than a few instances, they are getting their employers to foot the bill.

“We have a handful of people here who work at large companies that are far away and are paying for their employees to work here,” says Miguel McKelvey, owner of Green Desk, a co-working space in Brooklyn, New York.

Co-working is an attractive option for teleworkers in urban areas like San Francisco and New York, where employees may live in apartments that are too small for home offices, observers say.

And for employers like Relic, paying monthly fees that can range from $200 to $450 a month isn’t a huge cost, considering how hard it is to find specialists in certain fields, particularly technology, says Rose Stanley, practice leader, professional development at WorldatWork.

“Some employers may decide to subsidize part of it if it means keeping those employees,” she says.

Jurney says that co-working allows him to also brainstorm a bit with other programmers at Independents Hall—which he wouldn’t have been able to do working from home.

“It’s a pretty creative space,” he says.

To make sure that Jurney still feels connected to his colleagues at Relic, the company has placed a video camera on his old desk in Vancouver, where he works one week a month.

“So when you get in every morning, you can walk by his desk and say, ‘Hey, Chris,’ and there he is,” Williams says. “We want him to feel as included as possible.”

Whether company-paid co-working becomes a trend remains to be seen, but it’s a great thing for companies to know about, Stanley says.

“I think it will pick up as more companies become aware of this option,” she says. “It seems like these sites are popping up everywhere.”