UAW Strike Threatens to Close More GM Plants : Labor: Union’s action against parts-making plant has already halted production at four facilities and idled 20,000 workers.
The battle between General Motors Corp. and the United Auto Workers union escalated Monday as a strike at a Lordstown, Ohio, parts-making plant forced the auto maker to shut down two more factories, idling a total of 20,000 workers.
The five-day-old strike, which has halted production at four assembly plants so far, could idle thousands more workers and close as many as seven more plants if it is not resolved by the end of the week, the company said.
Negotiations continued Monday with little progress, UAW officials said. Neither the company nor the union would comment on specifics of the talks or the strike’s effects.
Strikes and saber rattling are par for the course when contract negotiations roll around every three years. But with a year to go before the current contract expires, the union is starting unusually early, labor experts say. That’s because by next year, it may be too late.
“The UAW’s great fear is that there could be a hemorrhaging of unionized jobs in the parts industry,” said Harley Shaiken, an expert on work and technology at the University of California, Berkeley. “What they negotiate in the contract doesn’t matter if all of that can be drained away in (parts) sourcing decisions.”
The UAW is facing the prospect of even more than the 54,000 union job cuts announced in December by the world’s largest auto maker. GM recently announced that it would restructure its parts purchasing activities.
J. Ignacio Lopez, the auto maker’s new purchasing chief, has threatened to take contracts away from GM’s notoriously high-cost internal parts divisions if they cannot meet the price and quality levels of independent suppliers. Industry analysts say that puts nearly half of the UAW’s 80,000 parts-related jobs at GM in jeopardy.
At the Lordstown parts plant, the union is fighting GM’s decision to subcontract work to non-union firms from a small tool-and-die operation in the facility. Analysts say the union is pushing GM so hard at Lordstown to symbolize its determination to resist the company’s attempts to “outsource” parts production.
The strike is especially effective because so many of GM’s assembly plants depend on the Lordstown plant for parts. GM’s Lake Orion, Mich., assembly plant, which builds Cadillac De Villes, Fleetwoods and Oldsmobile 98s, ran out of the steel body panels it receives from the Lordstown plant Monday morning. So did the company’s mid-size van plant in Baltimore.
Last week, the strike forced GM to stop production of its popular Saturn model in Spring Hill, Tenn. It also had to close an assembly plant in Lordstown that makes the Chevrolet Cavalier and Pontiac Sunbird.
If the strike lasts, GM’s van plants in Scarborough, Ontario, and Flint, Mich., are likely to be the next to close. And the company’s Wentzville, Mo., car assembly plant, which builds the Pontiac Bonneville, Buick Park Avenue and Oldsmobile 88s, will likely run out of parts today, GM spokeswoman Laura Joseph said. Car plants in Flint and Lansing, Mich, as well as Oklahoma City could also eventually be affected.
Such major disruptions in production could derail GM’s desperate attempts to turn a profit in its troubled U.S. auto operations this year. David Garrity, an investment analyst at Cleveland-based McDonald & Co., has already lowered his estimates of the company’s third-quarter results to a loss of 40 cents a share from 30 cents--based on the strike. General Motors stock rose $1.125 on the New York Stock Exchange Monday to close at $34.625.
For nearly two decades, GM has generally agreed to UAW demands in order to preserve peace. But industry experts say the ability to buy parts from the lowest-cost producers is crucial to GM’s much-vaunted restructuring efforts, and raises the stakes of this strike for the company.
GM spends $50 billion a year on parts, and Lopez is reportedly fond of telling suppliers that a 10% cut in material costs would boost GM’s profits as much as a 97% increase in sales would.
That raises questions about how quickly the strike will be settled.
“If GM management believes their credibility with investors is on the line based on how they resolve this with the UAW and the precedent it sets, then there is the possibility that GM management would let the strike go on longer,” said analyst Garrity. “It is critical, without a doubt.”
Who’s Idled and What Do They Build?
Here is a list of General Motors Corp. assembly plants that have been idled by a United Auto Workers strike at a parts-making plant in Lordstown, Ohio. Following that is a list of assembly plants threatened by a parts shortage but still operating.
On Strike: Plant: Lordstown,Ohio Workers: 2,400 Product: Metal parts Affected Plant: Spring Hill, Tenn. Workers: 5,200 Product: Saturn cars Affected Plant: Lordstown, Ohio Workers: 7,000 Product: Chevy Cavalier, Pontiac Sunbird Affected Plant: Baltimore, Md. Workers: 3,400 Product: Chevy Astro, GMC Safari midsize vans Affected Plant: Orion Township, Mich. Workers: 4,200 Product: Cadillac Deville and Fleetwood, Olds 98 Threatened Plant: Wentzville, Mo. Workers: 4,700 Product: Pontiac Bonneville, Buick Park Ave., Olds 88 Threatened Plant: Buick City, Flint, Mich. Workers: 4,000 Product: Buick LeSabre, Olds 88 Threatened Plant: Scarborough, Ontario Workers: 3,000 Product: Full-size vans Threatened Plant: Flint, Mich. Workers: 1,400 Product: Full-size vans Threatened Plant: Lansing, Mich. Workers: 7,000 Product: Olds Achieva, Pontiac Grand Am, Buick Skylark Threatened Plant: Wilmington, Del. Workers: 3,500 Product: Chevrolet Corsica and Beretta Threatened Plant: Okalahoma City Workers: 3,900 Product: Buick Century, Oldsmobile Ciera Notes: Saturn employees are still working in the Tennessee plant, doing housekeeping and receiving training. Olds 88 production is split between Wentzville and Buick City.
Source: GM
