Court Orders Umpire Into GM Strikes
A federal judge in Flint, Mich., on Wednesday directed General Motors Corp. and the United Auto Workers to attempt to settle two strikes through an independent arbiter.
U.S. District Judge Paul Gadola declined to order expedited arbitration hearings, as GM had requested, but encouraged the two sides to promptly set up meetings with a designated umpire.
“It seems to me you can go ahead and make progress toward ending this disastrous situation,” Gadola told attorneys for both sides.
The judge said it is unclear whether the federal court has authority to intervene in the dispute, which is entering its 42nd day, but that he will retain jurisdiction for now and attempt to push for a resolution.
Gadola ordered both sides to return to court on Tuesday with a progress report.
After the two-hour court hearing, GM and the UAW said they will set up a meeting as soon as possible with arbiter Thomas Roberts, who is designated to referee disputes between the two sides under their national contract. If arbitration proceeds, it would be binding.
Francis Jaworski, a GM attorney, said the company is satisfied with the judge’s ruling.
“Our goal all along was to get our differences settled at the table and to get our people back to work,” he said.
But Richard Shoemaker, UAW vice president and chief negotiator, said the court action will do little to resolve the dispute: “This will certainly not do anything to shorten the duration of the conflict.”
In a related development, Shoemaker and Gerald Knechtel, GM’s labor vice president, resumed talks Wednesday to end the costly strikes. Negotiations between the top-level bargainers had broken off over the weekend.
Lower-level talks are continuing on a daily basis at the two striking plants in Flint.
The strikes by 9,200 union workers began June 5 and 11 and have brought GM’s production to a virtual halt. The company has closed 25 of 29 North American assembly plants and scores of parts factories and laid off more than 178,000 workers.
The labor unrest appears to be spreading throughout GM’s vast manufacturing labyrinth. Three other plants are threatening strikes, and the UAW local at Saturn Corp., GM’s small-car unit, said Wednesday that it will hold a strike-authorization vote Sunday.
A strike at Saturn would be a major embarrassment to GM, since the Spring Hill, Tenn., company operates under a separate contract that is held up as a model of labor-management cooperation.
Joe Rypkowski, president of the UAW local at Saturn, said the union is concerned about GM’s plans to subcontract component jobs outside the plant and believes that workers are being shortchanged on promised bonuses that are tied to plant efficiency.
“This is about GM’s failure to live up to their commitments,” he said.
The court hearing in Flint came a day after GM filed a lawsuit in federal court in Detroit alleging that the strikes are illegal. In addition to immediate arbitration, GM said, it may seek an injunction to end the strikes and seek damages from the union. The strikes have already cost GM $1.2 billion, and the losses are piling up at an estimated $80 million a day.
GM argues that the walkouts were called because of disputes over plant investments, work allocation and parts sourcing, all issues that it says the union cannot use as basis for strikes.
The UAW, however, says the walkouts are legal and involve such strike-worthy matters as line speedups and safety violations.
Labor experts said it is uncertain whether arbitration can lead to a settlement. Most important, the referee must first decide whether the disputed issues are indeed subject to arbitration.
“This is what is called a threshold issue,” said Dale Brickner, a retired labor professor at Michigan State University.
If the arbitration fails, GM could pursue its claims in the courts. But experts see GM’s chances for success as slim, since the courts have traditionally been reluctant to intervene in strikes.
The labor disruption has occurred against a backdrop of GM’s continuing restructuring. The company has been trimming its work force largely through attrition, as it imposes more efficient manufacturing process and seeks to subcontract more parts with cheaper outside suppliers.
While analysts have generally applauded GM’s moves, they are increasingly concerned that the auto maker is not moving fast enough. They argue that Ford Motor Co. and other competitors are streamlining operations faster than GM.
Evidence of this was presented Wednesday in a closely watched industry study that found that GM would need to trim nearly 55,000 workers and reduce labor costs by $4.4 billion a year to match the labor productivity of the best auto assemblers in the U.S.
The report by Harbour & Associates of Troy, Mich., found that the gap in manufacturing productivity between GM and Ford, as well as the major Japanese competitors, is much wider than previously thought.
For instance, it takes GM 30.2 hours to produce each vehicle. That compares with 17.1 hours for Nissan, 21.3 for Toyota, 22.8 for Honda and 22.9 for Ford.
GM’s high labor costs of $812 per vehicle put it at a disadvantage to Nissan, which has the highest labor productivity of any company building cars in the United States.
“This confirms what we’ve been saying in Flint,” said GM spokesman Gerald Holmes. “We have to become more competitive.”
Times wire services were used in compiling this story.
* HIGH GEAR
Ford earned $2.38 billion in the quarter, beating Wall Street’s expectations. D4