UAW Strike in Ohio Closes GM Saturn Plant
A United Auto Workers union local in Lordstown, Ohio, struck General Motors Corp. on Thursday, causing the subsequent shutdown of the Tennessee plant that builds the hot-selling Saturn car and foreshadowing a bruising UAW-GM confrontation nationwide.
About 2,600 workers at the Lordstown stamping plant that is the sole source for key parts on the Saturn, among other vehicles, walked off the job at 10 a.m. in a dispute over threatened job losses at the plant’s tool-and-die shop.
Saturn quickly announced that it would halt production at 3 a.m. today, the end of its regular second 10-hour shift.
The UAW walkout is widely viewed as a test of GM’s toughness as it carries out a restructuring that will close 21 plants by 1995. Similar confrontations are likely at GM parts plants across the country as the company follows through on its plan to eliminate 74,000 jobs.
The strike hit Thursday morning as GM was shutting down its Van Nuys assembly plant after 45 years of operation. At the same time, but across the country, Saturn was showing off its 1993 models--including a new station wagon--to the automotive press at the Spring Hill, Tenn., manufacturing complex.
The brightest symbol of GM’s effort to reinvent itself, the Saturn has climbed steadily in the sales columns since its 1990 launch to a virtual tie with the Honda Civic for 10th place among all cars through the first six months of this year.
But sales have been constrained by supplies as its sole plant builds toward full production, and Saturn dealers have a mere six days’ worth of the cars on hand--versus the desired 50- to 60-day supply. The strike will cost Saturn 1,000 cars, or about $10 million in revenues, per day.
“It will have a serious impact on sales,” said Dennis McCroskey, general manager at Saturn of the Valley in Sepulveda. He has 17 Saturns on hand, enough to last 2 1/2 days, and customer deposits on 80 more of the cars.
Ironically, the innovative labor “partnership” between GM’s Saturn subsidiary and the UAW prohibits layoffs, even as a result of a UAW strike elsewhere. So while Saturn’s 6,000 workers in Tennessee won’t work what was to be an overtime schedule today, they will report to work Monday whether they are building cars or not.
The two sides in Lordstown are to resume talks today, and GM said it hopes to resolve the strike quickly. But even if the walkout is brief, the issues and strategies that prompted it are sure to carry into negotiations on the national UAW-GM contract that expires in September, 1993.
Top negotiators from GM and UAW headquarters in Detroit are directly involved in the talks, along with local plant and union officials. Neither side would comment on specifics of the negotiations.
“We still believe the issues will be resolved,” said Linda Cook, a GM spokeswoman. UAW officials said in a statement that the union is striking because of the “failure of GM to resolve job security issues.”
The chief issue in Lordstown is GM’s subcontracting of work from a small tool-and-die operation at the stamping plant to non-union firms. The tool-and-die shop is to be closed next year, part of a drastic overhaul of the North American car-making division that lost an estimated $7 billion last year.
Analysts and union watchers said the UAW’s walkout is an early test of the resolve of GM’s ax-wielding new management, especially its tough-talking new purchasing boss, J. Ignacio Lopez. And GM’s refusal to cave in may have already provided the answer.
“It may be looked on as challenging Mr. Lopez, after a fashion,” said a labor consultant with close ties to both the union and the company. “And the fact that GM took the strike indicates that they think it’s important. It is a significant strike.”
Lopez was recently brought in from GM’s profitable European operations by John F. Smith Jr., who was installed as president earlier this year in a boardroom coup triggered by the company’s sinking fortunes. Lopez has been dubbed “the Grand Inquisitor” for tearing up contracts and demanding drastic price cuts from GM’s suppliers, including its own vast parts-making network.
The union--fresh from a humiliating defeat at the hands of heavy-equipment maker Caterpillar Co. after a long strike, and anticipating hardball talks with GM on such pivotal issues as medical insurance--complains that GM is violating the labor agreement by giving work to outside, non-UAW contractors.
In addition to the Lordstown strike, workers at GM parts plants in Lansing, Mich., and Anderson, Ind., already have voted to strike on local issues. No deadlines have been set.
Said David Healy, auto analyst at S. G. Warburg & Co. in New York: “It will be fascinating to see how this thing resolves itself. In the past, GM has always caved in. And the union has it by the short hairs.”
The strikers work at a metal fabrication plant that makes stampings, or metal parts, for the frames of Saturns. GM’s new subsidiary, started from scratch eight years ago to take on the Japanese, has been pinched since production began in 1990 by an inability to produce enough to meet the rapidly escalating demand. The plant works two 10-hour shifts and a third shift is being recruited.
The Lordstown plant also makes stampings for the Pontiac Sunbird and Chevrolet Cavalier, which are built at an adjacent assembly plant, and for several vehicles at other plants.
Late Thursday, GM officials said production of the Sunbird and Cavalier would probably be halted sometime today because of a shortage of parts from the stamping plant. About 4,000 people work at the assembly plant.
While the most immediate strike impact is on Saturn, an interruption of Sunbird and Cavalier production could eventually lead to the loss of more jobs to Mexico, said Daniel Luria, economist at the Industrial Technology Institute in Ann Arbor, Mich.
The auto firm has been studying the production of some Sunbirds in Mexico, a plan that could win further support in management ranks as a result of the strike, said Luria.
“All these signs of militancy strengthen the hand of the management faction that wants to take the union on,” Luria said. “On the other hand, what’s the point of having a union if you never do anything?”
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