General Motors

(GM) - Get Report

and the United Auto Workers union will eliminate a controversial "jobs bank" program Feb. 2.

The jobs bank paid factory workers even when plants were closing or no jobs were available. The government required that GM end the program before it could collect $13.4 billion in federal loans. The loan deal also required ending 48 weeks of supplemental unemployment payments to laid-off auto workers, but Ron Gettelfinger, the UAW president, wants President Obama to nullify that measure.

GM has 1,600 workers in the jobs bank program, who will be laid off. GM spokesman Tony Sapienza said Wednesday that they'll need to file for unemployment; they'll receive about 72% of their salaries, which will be covered by state unemployment benefits and GM subsidies.

Each automaker's jobs bank varies, but at GM, laid-off workers could get 85% of their base pay, plus benefits, without reporting to work while the company tried to find them jobs elsewhere. Or workers could get full pay by reporting to a factory or union hall, where they could be called upon to perform community service or tasks around the plant.


recently cut its jobs bank program.

The jobs bank program existed since 1984, according to

The Cleveland Plain Dealer

. The union won the benefit as a way to discourage automakers from closing plants and sending jobs overseas.

The program also subjected the Detroit Three to harsh criticism from some lawmakers opposed to any bailout, particularly in Southern states where


(TM) - Get Report



(HMC) - Get Report

average hourly wages are significantly lower the the American automakers'.

This article was written by a staff member of Copyright 2009 Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.