GM to Shift Up to 1,000 Jobs From Mexico Plant : Autos: Plans call for moving Chevrolet Cavalier production to Michigan. Laid-off union workers will be rehired.
Two days before beginning contract negotiations with the United Auto Workers, General Motors Corp. made a conciliatory gesture Monday by saying it will shift most production of the Chevrolet Cavalier from Mexico to Michigan.
The move, expected to be ratified by union members later this year, will add 800 to 1,000 jobs at GM’s Lansing assembly plant. Most will be filled by laid-off UAW members.
The announcement comes on the eve of contract talks that begin Wednesday, with job security, wages and benefits the major issues. The current three-year contract expires Sept. 14.
It also comes as the Clinton Administration is pushing for approval of the North American Free Trade Agreement. The UAW opposes the treaty, saying it will result in high-paying U.S. jobs going to Mexico. Auto workers’ hourly wage rates in the United States are more than four times higher than in Mexico, and the disparity widens if benefits are included.
“GM had to have some kind of positive announcement to kick off this week’s negotiations,” said Sean McAlinden, an analyst for the University of Michigan’s Office for the Study of Automotive Transportation. “Mexico is a big concern for the union.”
GM Chief Executive Jack Smith said the production shift is “not any kind of a trend.” Indeed, company officials insisted the timing of the announcement was not linked either to the contract talks or the UAW’s concerns about NAFTA.
Rather, spokeswoman Kari Hulsey said the shift resulted from a union-management study showing ways the Lansing plant could become more competitive. The study was undertaken in October as part of GM’s efforts to cut costs and improve efficiency.
Hulsey said the company does not anticipate any loss of jobs in Mexico. A GM plant in Ramos Arizpe will continue to build Cavaliers and a new small car for the Mexican market.
Union and company officials said the job agreement demonstrates mutual recognition of the need for cooperation. It also appears to set a positive tone for the contract talks, which involve such difficult issues as health care and the use of non-union suppliers.
“It sets a pattern that management is credible--that they won’t make hollow promises,” said auto analyst Maryann Keller.
The UAW, which has lost 200,000 jobs at GM in the last 15 years, clearly was happy to gain some new jobs even as the auto maker continues to shrink employment. GM has vowed to cut its union work force to 250,000 from 304,000 by 1995. Some analysts think it may have to slim down to 210,000 hourly workers to become competitive.
As part of the downsizing effort, GM has been looking for ways to gain flexibility and run its plants at capacity. At Lansing, GM will build the subcompact Cavalier alongside three “N-Car” compact models: the Buick Skylark, Pontiac Grand Am and Oldsmobile Achieva. Previously, the union has resisted building different assembly platforms in the same plant.
Thomas J. Davis, GM vice president in charge of the Lansing operations, said the union agreement “allows production of significantly different vehicles in the same facility and . . . supports 100% capacity utilization.”
The four-door Cavalier has been one of GM’s best sellers this year, spurred by aggressive price cutting. The car is being redesigned for the 1995 model year.
The Cavalier is also produced at GM’s plant in Lordstown, Ohio, and there were concerns expressed Monday that GM now will pit that facility against Lansing.
