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Innovative approach to plant closings: the UAW-Ford experience at San Jose.

Innovative approach to plant closings: the UAW-Ford experience at San Jose

A systematic approach to plant closings and worker retraining was developed by the Ford Motor Co. and the United Auto Workers union (UAW) in the fall of 1982, when Ford announced the impending shutdown of its San Jose assembly plant. This joint labor-management initiative provided assistance to dislocated workers in the form of orientation sessions, assessment and testing, basic education, vocational exploration courses, in-plant seminars, targeted vocational retraining, prepaid tuition assistance, on-the-job training, job search training and placement, and preferential placement.

The decision to close the San Jose assembly plant was announced on November 18, 1982. Company officials believed it would be unfair to employees to hold out hope for jobs in the future. They promised San Jose workers substantial termination benefits and help with finding new jobs. When possible, Ford would relocate workers to other company plants. The date of the official closing of the plant was set for 6 months later, May 20, 1983.

When the plant closing was announced, the eight-member local Employee Development and Training Program Committee, recently created under the provisions of the UAW-Ford 1982 national agreement, moved into action. Jointly chaired by the plant's industrial relations manager and the UAW local 560 bargaining chairman, the committee worked closely with a representative of the California Economic Adjustment Team, a statewide "rapid response' unit created by the governor in March 1981 to coordinate the responses of State agencies to plant closings. Together, the State's Economic Adjustment Team and the plant's Employee Development and Training Committee conveyed a community task force. Within a week, plans were under way to mobilize the necessary resources to provide services to San Jose workers.

The local Employee Development and Training Program Committee and Ford management established an Employment and Retraining Center in the plant 4 days after the announcement of the plant closing. Two supervisors and two hourly paid union members were assigned to serve as training coordinators and respond to the needs of the workers. Ford paid the salaries and wages of the Employee Development Training Program Committee members and the Employment and Retraining Center employees. The company also agreed to provide space at the plant to house other public agencies, such as the California Employment Development Department (which provided job service counseling) and Milpitas Adult Education. The delivery of services to the workers began immediately, and some services continued for more than a year after the plant was shut down.

In the 4 weeks following the November 1982 plant shutdown announcement, procedures were established and services organized under the direction of the local Employee Development Training Program Committee with the assistance of the California Employment Development Department and other agencies. In addition to providing four full-time training coordinators, the Committee organized and coordinated a variety of programmatic responses. Most of the services were delivered onsite during and after work hours.

Orientation and benefits. Systematic orientation meetings were held to inform workers what was happening, what services were available, what benefits they could expect to receive, and what procedures were necessary to participate in various programs. In addition, Ford prepared and distributed "personalized' information for each worker about what his or her benefit situation would be at the time of shutdown.

Most of the workers were eligible for 52 to 104 weeks of supplemental unemployment benefits. They also received continuation of company-paid health insurance for up to 25 months, and nearly all were eligible for either immediate retirement or subsequent vested pension benefits upon reaching age 55 or 62.

Assessment and testing. All workers who wished to participate in remedial education courses and targeted vocational retraining programs were required to undergo testing to assess their education and retraining needs. California Employment Development Department counselors explained the test results and channeled workers into adult basic education, vocational training, or job search, as appropriate. During the next 12 months, more than 1,600 Ford workers took the tests and 2,000 had a skills assessment and employability plan prepared by the Employment Development Department counselors.

Adult basic education. The Milpitas Adult Education office provided courses in basic math, reading, english as a second language, and general education development (GED) classes. The classes were taught in the plant after work. The first round of classes lasted 3 weeks, but due to their popularity, five additional sections were offered, each lasting 12 weeks. Several hundred workers participated in each section, with a total attendance of more than 900, representing 531 individuals. GED courses were taken by 183 workers, who subsequently passed the GED examination.

Vocational exploration courses. Beginning in January 1983, courses lasting from 2 days to 2 weeks were taught in-plant by experienced Ford personnel during periods of assembly line downtime to help workers begin thinking about training and decide if they were seriously interested in learning a particular trade. The courses included personal computers, welding, statistical quality control, auto mechanics, upholstery, programmable logic control, forklift operation, metal repair, and basic electricity. If workers were interested in pursuing one of these trades, they could enter formal vocational training courses. More than 2,100 workers enrolled for the vocational exploration courses conducted by plant personnel from January to July 1983.

Seminars and programs. A variety of other in-plant seminars was offered by outside providers from January to June 1983. Some of these had a vocational orientation--small business, real estate, armed security guard--and others were designed to meet personal needs--financial counseling and a loan seminar. These seminars were attended by 691 workers.

Targeted vocational retraining. Area education and technical training institutions were invited to submit proposals for classroom targeted vocational retraining courses. The 140 proposals received were evaluated and considered against criterial related to the availability of job openings in demand occupations. Those which met the criteria and elicited sufficient interest among the workers were offered. The California Employment Development Department staff approved the courses and the applicants' eligibility for unemployment insurance, while the plant's Employment Retraining Center staff helped enroll workers and monitor their progress. Most targeted vocational retraining contracts were performance-based --specifying that the course provider must place a substantial percentage of the workers in jobs in order to receive payment.

More than 500 workers enrolled in over 30 targeted vocational retraining courses, including microwave technician training, machine tool technology, auto service technician, computer repair, welding, machinist, plant maintenance mechanic, computer-aided design drafting, electronic technician, heating and air conditioning, landscaping, and semiconductor mask design. Funds to pay for these courses were provided by the UAW-Ford National Development and Training Center of the "Nickel Fund' (as outlined in the parties' 1982 agreement), Job Training Partnership Act Title III, Trade Adjustment Act, and the California Employment and Training Panel.

Prepaid tuition assistance. A program set up by the UAW and Ford under the 1982 national agreement and called the National Vocational Retraining Assistance Plan provided prepaid tuition assistance for certain laid-off employees. It covered tuition and fees up to $1,000 a year at an approved educational institution and, depending on seniority, up to 4 years for self-selected education and training. Nearly 200 workers took advantage of this program.

On-the-job training program. Through the persistent and coordinated efforts of the company's Employee Development and Training Program committee and its political allies, a $638,000 grant was obtained from the California Employment and Training Panel to fund an on-the-job training program for 360 workers. The Panel was created by the California legislature to divert 0.1 percent of unemployment insurance funds from positive-reserve employers (approximately $55 million per year) for retraining purposes over a 4-year period. All training provided by these funds is directed toward specific jobs, and there must be a commitment by the employer to hire the trainees. Payment is made to the trainer or employer only if the trainees go to work.

At San Jose, the funds were used to hire a team of job developers; determine skill shortages and demand occupations; develop job sites and training opportunities among demand employers; identify, select, and place Ford workers in the on-the-job training slots; and monitor the progress of the trainees in their new jobs. The job developers were experienced Ford production personnel who were able to talk the same language as the laid-off workers, understand the needs of employers, and sell the virtues of the workers to prospective employers. More than 360 Ford workers were placed in training in the first 6 months.

Job search training and job placement. Two-day job search training workshops were conducted by California Employment Development Department staff for workers who were ready to begin the search for new jobs. As the plant closing date approach, additional workshops were offered. A total of 438 employees went through a job search skills workshop.

The plant's Employee Development and Training Program Committee started job development and placement efforts early, and did not rely wholly on the job services offered by the California Employment Development Department. A staff member was assigned to contact area employers, tell them about the skills possessed by Ford workers, and invite them to the plant to see the skills being used. As the closure drew near, these activities were formalized and an expanded job placement center was opened. In addition, a job club, complete with phone banks, was organized.

Preferential placement. Under the 1982 national agreement with the UAW, Ford allows qualified employees to move to other locations where openings are available. Ford assists them in making the transfer and allows them to return to San Joseph after a trial period without losing their benefits. A total of 117 San Jose hourly workers elected to relocate to other Ford plants nationwide.

Results of the program

A number of very positive outcomes were achieved by the UAW-Ford program at San Jose. The workers' high participation rates in assessment and testing, basic education and remedial training, targeted vocational retraining, on-the-job training, and job search training all suggest a much higher "take-up rate' than normally occurs in such programs. The 70-percent workers' participation rate in testing and assessment and the 30-percent participation rate in education and training courses were much higher than those reached in other plant closures, according to available data. In fact, the 25-percent participation rate in adult basic education programs is unique. Equally significant is the low rate of dropouts in the targeted vocational retraining programs --fewer than 10 percent--indicating good preparation and high motivation of the students. There was also a lower incidence of social pathologies (drug abuse, alcohol abuse, child and spouse abuse, and suicides) than in similar shutdowns.

Job placement, the ultimate objective of programs of this kind, appears to be quite high. Although final statistics are not yet in, more than 80 percent of the employees who took training courses are now employed. To date, more than 83 percent of those who reentered the labor market have secured employment, many in skilled jobs paying wages approaching their Ford earnings. Twenty-one percent of the San Jose work force are retired or are expected to retire. Considering the high levels of available Ford benefits--which may have delayed the need for reentry into the labor market for some workers--the reemployment rates are impressive.
COPYRIGHT 1985 U.S. Bureau of Labor Statistics
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Title Annotation:Thirty-Seventh Annual Meeting of the Industrial Relations Research Association, Dallas, December 1984
Author:Hansen, Gary B.
Publication:Monthly Labor Review
Article Type:transcript
Date:Jun 1, 1985
Previous Article:Gaps in monitoring wages and industrial relations.
Next Article:Airline union concessions in the wake of deregulation.

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