GM Says Parts Divisions Must ‘Earn Their Way’ : New President Calls for Separate UAW Contract
General Motors Corp.’s new president, Robert C. Stempel, said Tuesday that the nation’s largest auto maker’s many parts and components operations must “earn their way” or face sale or closure.
Stempel also stressed that GM will try to negotiate its own United Auto Workers contract, despite the union’s decision Monday to reach a settlement first with Ford Motor Co. and then try to win a similar one from GM.
“General Motors is a much different corporation than virtually any other maker,” Stempel said at a news conference as he started his first day on the job.
Stempel, a former GM executive vice president in charge of truck operations and overseas companies, succeeded F. James McDonald as president and chief operating officer. McDonald retired Monday after six years as president and more than 40 years with GM.
Competition a Factor
Stempel said UAW and GM bargainers need to look to their competitors, especially new firms doing business in the United States, for ways to pay and organize parts workers, which may be different from assembly plant workers. He added:
“We make a great deal of the components we use, and we sell a great deal of our parts outside General Motors. If we’re going to be competitive in those businesses, general (labor) contracts may not apply in some of those areas where we have new competitors in the supply industry.”
However, Stempel added: “If I can get those component divisions to really earn their way, there’s no question about their being here or their job security. . . . I’m talking about earning their way here in America.”
GM’s nearly 90 parts and components plants employ about 120,000 of its 335,000 UAW-member workers. GM makes about 70% of its own parts, compared to about 50% at Ford and 30% at Chrysler Corp. GM officials have said that about 54,000 of its parts workers make parts that other auto makers buy, often for less, from outside sources. The UAW’s contracts with GM and Ford expire Sept. 14. Chrysler’s contract expires next year.
GM’s first two contract offers called for lower pay for parts workers than for assembly plant workers. The second offer would have allowed the company to negotiate wages with locals at individual plants that the company determined were uncompetitive--a major break with a basic union tenet of negotiating wages at the national bargaining table.
The UAW rejected both offers.
Stempel said outside sales make up 10% of GM’s parts business and that those sales were twice as great as all the $2.8-billion total 1986 sales of Chrysler’s new components subsidiary, Acustar Inc.
