July 30, 2009

Michigan, Chrysler face $10M dilemma

Chrysler workers are facing an ethical dilemma with an offer from Michigan to file for unemployment that union officials say is prohibited in their contract.

The summer production break, scheduled for July 13-24 this year, has traditionally allowed United Auto Worker members to file for unemployment and collect a supplemental check provided by the company. But, the contract that emerged from Chrysler's bankruptcy proceeding includes a clause that says, employees will be required to utilize two weeks of their vacation entitlement for a mandatory shutdown, the Detroit Free Press reported Thursday.

Unable to distinguish between a vacation and a temporary shutdown, Michigan's Unemployment Insurance Agency sent thousands of letters to union workers informing them they were eligible for benefits, a redundancy that could cost the state $10 million, the newspaper said.

Chrysler Group LLC, the company that emerged from the bankruptcy, said it was working with the state to resolve the issue.

The period in question isn't payable, the company said in a statement.

Workers collected vacation pay for the break in May, the Free Press reported.