GM Cuts Production at U.S. Plant
The 12-day-old strike by the Canadian Auto Workers against General Motors Corp. interrupted car assembly on the U.S. side of the border for the first time Monday as GM’s layoff of 1,350 workers at a Cadillac plant near here took effect.
Since the strike began Oct. 3 in a dispute over the contracting of parts work to outside suppliers, GM has laid off 7,000 U.S. workers. Until now it had avoided curbing production at any U.S. car-making facilities.
No end to the strike is on the horizon, and the deadlock raises the specter that much of GM’s assembly operations could soon close in a domino-like sequence with shortages of parts made in Canada.
The strike has become a bitter test of wills that is being played out across national boundaries. The union is staking a claim that workers, not companies, own their jobs. GM’s mantra is flexibility and global competitiveness.
Such a situation hit GM hard in March when a 17-day strike over job security by union workers at two Ohio brake plants closed 26 assembly facilities, idled 177,000 workers and cost GM $900 million.
Thus far, the U.S. impact of the Canadian strike has been muted by GM’s stockpiling of parts and alternative sourcing for some key components. It could take two to three weeks before the full effect of the strike is felt, analysts said.
“We will be running for a while,” said Richard Wagoner, GM president of North American operations.
Still, GM furloughed hourly workers on the second shift at its Cadillac plant in Hamtramck, a Detroit suburb. The plant is running short of seats supplied from a Windsor, Canada, plant and could close entirely today.
Also vulnerable to closure this week is a plant in Lordstown, Ohio, that makes the Chevrolet Cavalier and Pontiac Sunfire.
GM has also laid off 2,900 workers in its U.S. engine and transmission operations and 1,661 parts workers, mostly in Mexico. Analysts estimate the strike is costing GM $50 million a week in profit, which could balloon to $150 million a week if the strike spreads.
In Canada, 26,000 GM workers are on strike. The walkout has also prompted suppliers of the auto maker to lay off thousands of parts workers.
The dispute is estimated to be taking about $73 million a day in business activity out of the Canadian economy, which is in the midst of a weak recovery.
There were no significant talks over the weekend as negotiators went home to celebrate Canada’s Thanksgiving on Monday. Negotiations are scheduled to resume today, but the immediate prospects for progress appear dim.
“There doesn’t seem to be a desire right now for a settlement,” said Basil “Buzz” Hargrove, CAW president. “For whatever reason, GM is testing our mettle. But they have misread us and are in for a rude awakening.”
The dispute in Canada has slowed talks between GM and the United Auto Workers on a new three-year contract covering U.S. workers. However, the two sides continue to meet, and sources indicate they are close to an accord.
The UAW has already forged agreements with Ford Motor Co. and Chrysler Corp. that provide for a 95% minimum guarantee of current work force levels. GM has resisted the job security measure, but sources said a compromise is likely to be reached that would allow GM to downsize while meeting the minimum-guarantee requirement.
Times staff writer Craig Turner contributed to this report.
