Kyle Geissler talks with Janesville Gazette business editor Jim Leute about a decision not to extend benefits for LSI workers, and prospects for GM to get the TAA benefits.
JANESVILLE — The federal government has denied an extension of unemployment and education benefits to workers who were laid off at LSI in Janesville as a result of production cuts at the General Motors assembly plant in Janesville.
And whether GM workers will qualify for the extended benefits remains undecided.
The Department of Labor ruled that the workers at LSI do not produce a product and therefore are not eligible for Trade Adjustment Assistance that would extend benefits for up to 130 weeks.
Typically, TAA status is granted on a case-by-case basis when workers are displaced by global competition.
Whether the GM plant’s product has been adversely affected by global competition likely will be decided this fall.
GM and the UAW are working on a separate petition for their workers at the plant.
Mary Frederick, the UAW-GM joint activities representative at the plant, has been working on it for weeks.
“The department looks at a 12-month window,” she said. “So what we use as that 12-month window is critical in the success of the petition. We certainly haven’t been dragging our feet in filing the petition. We’re just trying to get the timing right.”
Frederick said the petition likely would be filed in September.
In the past, some auto-related layoffs have been approved for TAA, which basically continues to pay unemployment benefits after the state’s 26-week program expires. Some experts have said, however, that TAA might not be available to GM workers because high gas prices more than foreign competition caused the closures.
Frederick said she’s aware of that, but the petition must still be filed on behalf of the displaced GM workers.
“TAA is based on the loss of jobs to imports,” she said. “We’ve been told that we may be able to build a case on sales. If 20 percent or more of your sales loss is due to imports, then you can qualify.
“But, in our class, we’re competing against the Toyota Sequoia and Nissan Pathfinder, and they’ve lost sales, too.”
To receive TAA benefits, workers must be enrolled in some sort of job training program and do job searches. TAA allows up to $15,000 for additional education and re-training for eligible workers.
Earlier this year, GM announced that it would cut second-shift production in Janesville as a result of slow sales of the full-size sport utility vehicles built here. Officials have blamed a struggling national economy and soaring gas prices for a consumer shift from big trucks to small, fuel-efficient cars.
GM since has announced that it will end all production in Janesville by 2010 or sooner.
By eliminating its second shift, GM said it would lay off 852 people.
LSI, which sequences and delivers parts to GM, followed with its announcement that it would lay off 132 of its 235 workers.
Lear Corp., which makes seats for GM in Janesville, said it would lay off 336 of its 660 employees.
LSI, formally known as Logistics Services, Inc., filed its petition for TAA benefits with the Department of Labor on June 2. The top criterion for TAA certification is that the workers’ company produces a product.
Rich Johnson, United Auto Workers Local 95 shop chairman at LSI, said he understands that LSI workers don’t make anything.
“What we do is sequence, so in that regard I understand it,” Johnson said. “We knew it was a long shot because we don’t make a product.”
But a portion of the Department of Labor’s decision has Johnson and others in Local 95 scratching their heads.
The decision reads: “The parts supply workers at Logistics Services, Inc., Janesville, Wisconsin, do not support a firm or appropriate subdivision that produces an article domestically, and thus the worker group can not be considered import-impacted or affected by a shift in production of an article.”
The union officials counter that LSI’s existence in Janesville is entirely tied to the GM plant, which most certainly produces a product.
Johnson said the union plans to appeal the department’s decision on LSI. When it does, it probably will piggyback it on the petition to certify GM workers for TAA benefits.
If the LSI appeal is denied, the affected workers will be left with the standard 26 weeks of state unemployment compensation that pays a maximum of $355 per week.
“It’s really frustrating,” said one LSI worker who requested anonymity. “I’m concerned because there are a lot of people running around doing job searches and looking at schooling.
“Now they’re finding out that they won’t get those benefits.”
Questions of fairness
While extended unemployment benefits and training have been denied for one Janesville company and are uncertain for another, they’re apparently locked in for a third.
And that might raise questions of fairness among the 1,320 workers who have been laid off in Janesville as a result of General Motors’ decision to cut second-shift production here.
The employees—852 at GM, 336 at Lear Corp. and 132 at LSI—all have been laid off for the same reason. Its starts with the plummeting sales of full-size sport utility vehicles built at GM and trickles to Lear and LSI, the two largest GM suppliers in Janesville.
But the U.S. Department of Labor ruled that LSI workers are not eligible for Trade Adjustment Assistance that would extend benefits for up to 130 weeks. Essentially, the department ruled that LSI workers do not make a product and are therefore not eligible for the assistance.
A petition for TAA benefits for the displaced GM workers likely will be filed in September, but it’s considered a long shot because GM’s decision was based on the domestic economy and not the result of global competition, which is the tenet of the TAA program.
Lear workers, however, will get TAA benefits even though they recently have been laid off for the same reasons as their counterparts at GM and LSI.
That’s because workers at Lear, which builds seating systems for the GM plant, gained TAA certification in January 2007, shortly after the Janesville operation lost some welding work to a facility in Canada.
Once a worker group is certified, it is covered for up to one year before the petition is filed and up to two years after the certification is issued. In the case of the Lear workers, the TAA certification makes benefits available to employees laid off between Dec. 21, 2005 and Jan. 9, 2009.
“I can see where there will be some animosity about it,” said Mike Vaughn, United Auto Workers Local 95 shop chairman at Lear. “I’m sure people will point fingers, but it’s not because of anything Local 95 did or didn’t do. It’s just the way the federal rules are written.
“What’s going on with us getting the benefits has absolutely nothing to do with the automotive world we’re living in today.”
Without TAA benefits, workers at LSI will get 26 weeks of state unemployment compensation that tops out at $355 per week.
For GM workers, supplemental unemployment benefits negotiated into their national contract will boost that check. When state unemployment runs out, SUB pay will increase to cover the loss of unemployment and continue for another 22 weeks.