GM’s Strikes Enter 6th Week as Intense Talks Continue
Strikes against General Motors Corp. entered their sixth week Friday as company and union bargainers continued intense talks without reaching a settlement.
Prospects for an agreement between GM and the United Auto Workers union remain uncertain, but most analysts still expect a deal to be worked out this weekend or early next week.
“They’ve got to settle soon,” said Diane Swonk, economist for First Chicago NBD Corp. “GM wants it. The rank and file want it.”
Gerald Knechtel, GM’s top negotiator, told reporters Friday that talks to end the strikes at two Flint, Mich., parts plants are going slower than hoped but that he still believes a deal can be hammered out in the next two days.
A major stumbling block is GM’s demand that the UAW pledge not to strike at three other plants.
“It doesn’t make much sense to settle these strikes only to be at risk to go on strike elsewhere,” Knechtel said.
GM, the nation’s biggest industrial concern, is pushing for a settlement before Monday, when its plants are scheduled to restart production after a normal two-week summer shutdown.
A quick return would allow GM to resume full production in three to six days, thus limiting the financial damage inflicted by the strikes by 9,200 UAW members at the Flint plants.
The walkouts slashed GM production in half in June, reducing its output by 227,000 vehicles and trimming second-quarter earnings by $1.2 billion. Beginning next week, analysts say, losses will begin mounting by as much as $80 million a day.
“That’s a lot of cash being burned,” said Joseph Phillippi, analyst with Lehman Bros.
The strikes have forced GM to close 26 of its 29 North American assembly plants and to lay off nearly 162,000 workers. GM has also closed or reduced work at about 75 parts plants, and scores of outside suppliers have laid off thousands of workers.
The dispute is centered on work rules, factory conditions and job security. While local in nature, the conflict has broad implications since it involves issues of jobs and efficiency that will likely be the center of national contract negotiations next year.
About 3,400 workers at a Flint stamping plant, which makes fenders and hoods, walked out June 5 because of the union’s assertion that GM has reneged on investment promises. GM argues that the UAW is not living up to changes in work rules that would allow new equipment to be operated more efficiently.
The dispute at the second plant--which makes oil filters, spark plugs and other small parts--revolves around outsourcing. The UAW says GM wants to trim 2,500 of the factory’s 5,800 jobs by moving work to outside suppliers or to a plant in Mexico. GM says the Flint plant is losing money and is inefficient.
Richard Shoemaker, vice president and chief GM negotiator for the UAW, said Friday that the onus to settle is on the company and that the union will not accept an agreement based on an artificial deadline set by GM and Wall Street analysts.
“There isn’t any question that they could settle this thing if they choose to do that,” he said of GM.
The UAW is seeking a comprehensive settlement that would resolve disputes at the Flint parts facilities as well as the Buick City assembly plant, also in Flint, which GM plans to close next year. Workers are threatening strikes there and at parts facilities in Dayton, Ohio, and Indianapolis.
GM shares, which have fallen 5.6% since the strikes began, remained unchanged at $71.19 on the New York Stock Exchange.
