Judge Orders GM, UAW to Arbitration
In a small victory for General Motors Corp., a federal judge Tuesday ordered the United Auto Workers and GM to promptly begin arbitration to determine if lengthy strikes paralyzing the auto maker are illegal.
The hearings, which were previously scheduled, are to begin today before Thomas Roberts, a veteran arbitrator from Roling Hills, Calif. The proceedings are expected to take several days.
U.S. District Judge Paul Gadola warned Tuesday that he would not tolerate any attempt to delay or impede the binding arbitration. Efforts to slow the hearings would be met with contempt citations and fines, he said.
The judge’s order comes six days after he urged the two sides to enter arbitration voluntarily. His order Tuesday effectively granted a GM motion filed last week seeking immediate arbitration.
GM hopes expedited arbitration will end strikes at two parts plants in Flint, Mich., that have brought its North American production to a virtual standstill. The walkouts, which began June 5 and June 11, have forced GM to close 26 assembly plants and lay off nearly 189,000 workers.
The latest casualty was a key truck plant in Oshawa, Ontario. GM spokesman Gerald Holmes said the Canadian plant ran out of parts Tuesday afternoon to make the 1999 Chevrolet Silverado and GMC Sierra full-size pickup trucks.
The new models are important because together they are GM’s largest volume product, yielding profit of more than $5,000 a unit. A delay in the pickups’ planned launch this fall could mean additional lost customers and profit for GM.
GM’s Mexican unit also said Tuesday it would restart production Monday at a plant in Silao, Mexico. The factory, which employs 2,255 workers, makes the Chevy Suburban and Silverado. GM de Mexico said it has found alternative sources for parts that have run in short supply because of the U.S. strikes.
Auto suppliers report that GM is shopping for parts to reopen as many as 10 assembly plants if the strikes continue. But auto analysts said it would be difficult for GM to reopen that many plants soon.
Meanwhile, negotiations are continuing between the UAW and GM with little sign of progress. In recent days, the focus has switched from the bargaining table to the arbitration proceedings.
GM sought arbitration in a lawsuit filed last week in federal court in Detroit. If it prevails, the company would seek court orders to end the walkouts and to recover damages. GM said it lost $1.2 billion in the first month of the strike and analysts now estimate daily losses at $80 million.
The auto maker alleges the walkouts are illegal because they are over investment, work allocation and parts-sourcing decisions, which are not legitimate strike issues under the national contract.
The UAW, however, says the strikes involve hundreds of local grievances over production standards, such as line speedups and safety violations. The contract allows strikes on these issues.
Roberts, 74, has arbitrated numerous matters between GM and the UAW since 1987. His biggest previous decision was backing GM’s closing of the Pontiac Fiero plant in Lansing, Mich., in 1988. The union alleged the shutdown violated a plant closing moratorium GM had agreed to. But Roberts ruled the closing was allowed under the contract since it was related to a slump in Fiero sales.
Roberts, an arbitrator since 1958, is best known for handling salary disputes and free-agency issues for major league baseball. He also handled a major seniority dispute involving pilots following the merger of Northwest Airlines and Republic Airlines in 1986.
Some labor-relations experts give GM little chance of succeeding in arbitration, saying it will be difficult for the company to prove that strikes are not tied in some way to the local grievances.
“It would be hard for GM to argue that the UAW’s claims are not valid,” said John Stamm, a professor of management at Babson College near Boston.
GM, however, feels that its case is strong. “We’re confident legally in our position, despite the many so-called experts that make comments about our legal theories and proceedings,” said GM lawyer Francis Jaworski.
In its court filings, GM says the strikes stem from its decision to withdraw $180 million in investment and new stamping work from the Flint Metal Center, a plant that makes hoods, fenders and engine cradles. GM says it withdrew the commitments because the union backed away from promised work-rule changes that would allow it to run equipment more efficiently.
GM said that about 250 local grievances were filed within three weeks of its decision to take work away from the Flint plant. Thomas Gottschalk, GM general counsel, said the grievances were filed as a “pretext” for a strike that is really about national issues.
The union denies the charge. UAW lawyer Michael Nicholson argued Tuesday that the disputes are beyond the court’s jurisdiction and the arbitration order was unnecessary since the two sides had already agreed to hearings.
But Gadola, whose father ruled that the famous 1937 sit-down strikes in Flint were illegal, said he would keep jurisdiction of the case and enforce any ruling of the arbitrator.
Analysts said that even if GM wins the arbitration case, its labor problems are far from over. Four GM plants, including the Saturn plant in Spring Hill, Tenn., are threatening strikes later this year.
