Clause for Celebration : Saturn Workers’ Contract Keeps GM Strike at Bay

General Motors Corp. has laid off 175,000 hourly workers as a result of a brake factory strike in Dayton, Ohio, but not the 7,300 union workers at its Saturn plant in Spring Hill, Tenn.

Even though Saturn has been forced to stop building cars because of a shortage of brake parts, its unique labor agreement with the United Auto Workers union has kept its work force busy on job training, plant maintenance and future product planning.

“We would like to be making cars. That’s what we do best,” Saturn spokeswoman Candy Best said. “But there are plenty of other things we can do to be productive in the meantime.”

So while UAW members at 25 other GM assembly plants and 89 parts plants have been left out in the cold--many uncertain if they will even be able to collect unemployment checks--Saturn workers are putting in their normal shifts and getting regular paychecks as if the labor dispute in Dayton did not exist.

(That’s not all Saturn’s workers have to be happy about. Whereas other GM workers recently got 1995 profit-sharing checks of $800, Saturn workers received bonuses of $10,000 each for meeting production, quality and profit goals.)

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Saturn remains an anomaly in GM’s sprawling operations, but it also highlights an issue negotiators in Dayton are putting under the microscope: the need for greater worker flexibility and productivity.

The Ohio labor dispute is largely over GM’s desire to outsource--that is, buy brake parts from outside suppliers. GM said one reason it is looking elsewhere is that the UAW’s work-rule rigidity makes it difficult to make parts more cheaply than nonunion suppliers. At Saturn, by contrast, factory-floor flexibility and labor-management teamwork are a basic tenet of the company’s collective-bargaining agreement.

“Saturn underscores that other contracts that GM and other auto makers have with the UAW are outdated,” said Chris Cedergren, an analyst with AutoPacific Group. “They need agreements that foster productivity.”

The strike at two GM Delphi Chassis Systems plants is now into its third week. Negotiators have been meeting almost continuously since Sunday and were still talking Wednesday night. It is the biggest work stoppage to hit the company since 1970 and is costing GM an estimated $40 million daily in lost profit.

With 26 of its 28 operable North American assembly plants closed by the strike, the nation’s No. 1 auto maker is producing vehicles only at two Mexican plants. It is also building cars at two plants it owns jointly with other companies, including the New United Motor Manufacturing Inc. plant in Fremont, Calif., which is half-owned by Toyota Motor Corp.

Neither side accepted an offer Wednesday by Labor Secretary Robert Reich to make available the services of federal mediators, but Reich noted that “the company and the union have a long history of resolving disputes without the assistance of federal mediators.”

While it is far from business as usual at Saturn, its status as a test bed of labor-management cooperation has allowed it to refocus its manpower to useful purposes during the impasse in Ohio.

Saturn’s approach is similar to what Japanese auto makers once did when faced with production slowdowns. Traditionally, the Japanese shunned worker layoffs and used production troughs as a time to catch their breath, take stock of matters and figure out how to become leaner and meaner.

(The economic problems in Japan that have hit the domestic auto industry in recent years, however, have shattered the guarantee of lifetime employment for workers.)

“They are doing what the Japanese do,” said Joseph Phillippi, an analyst at Lehman Bros. “There are always things you can do with training when there are new models in the pipeline and new processes to be introduced. This is a good time to do it. It’s the smart thing to do.”

Saturn normally makes 1,120 sedans, coupes and wagons daily at its 4.2-million-square-foot manufacturing facility in the rolling Tennessee horse country just south of Nashville. It is gearing up to introduce two updated 1997-model sports coupes this summer and a right-hand-drive sedan for export to Japan early next year.

The new models will be built on the same line as the existing models. The current production shutdown has provided Saturn the opportunity to provide concentrated training to workers in building the new products and to work out any bottlenecks that may arise.

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“This should help us have a seamless start-up,” said Greg Martin, a Saturn spokesman in Detroit.

Under Saturn’s contract, the company’s 8,200 workers must each complete 92 hours of training a year. That means devoting roughly 5% of normal work hours to so-called continuous-improvement programs.

Although Saturn executives said the training is vitally important, it is also costly. A person taken off the line for training must be replaced by another worker, which sometimes means overtime since the replacement may not be as proficient at the job.

The contract bars layoffs except under extreme financial conditions, and that is what has kept Saturn workers on the job during the Dayton strike. The clause has gone a long way toward eliminating job security as a major concern of Saturn workers.

“They can’t be laid off for outsourcing,” said Irving Bluestone, a labor professor at Wayne State University and a former UAW vice president. “The whole Saturn approach is an excellent one that others should look hard at.”

Since the strike began, Saturn has increased its training programs, adding night classes on such topics as quality, diversity management and team development. It has also emphasized computer training since it has upgraded its factory-floor systems with Windows 95.

In addition, the production shutdown has given the company an opportunity to thoroughly clean the plant and do major maintenance on automated machines and equipment. All manufacturing at Saturn is handled by interdisciplinary teams that include union members and management. Each is trained to do a variety of jobs.

Saturn is held up by proponents of cooperation between labor and management as the wave of the future. But transferring the Saturn model, at least in terms of labor relations, has proven difficult largely because of resistance of the UAW leadership in Detroit.

New UAW President Stephen Yokich has been a critic of the Saturn approach, fearing that cooperation would amount to co-option of union and worker prerogatives.

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A Different Relationship

Here are key provisions of the United Auto Workers union’s unique labor contract with Saturn Corp.:

* Each worker must complete 92 hours of training a year.

* A no-layoff clause, except in the event of extreme financial conditions.

* Yearly bonuses of as much as $10,000 for meeting quality, productivity and profitability goals.

* Joint labor-management decision making on everything from design and marketing to choosing suppliers.

* A “risk-reward” system whereby employees’ base pay is 10% less than other UAW members, but the difference is recouped if the entire work force completes a certain level of training each year.

* Flexible work rules.

Source: Times reports

Researched by JENNIFER OLDHAM / Los Angeles Times