GM, UAW Amplify War of Words

Escalating a battle with the United Auto Workers, General Motors Corp. said Wednesday that a striking parts plant that has closed much of its production is losing $50 million a year because of inefficient work practices.

Donald Hackworth, vice president of GM’s North American car group, said the issue at hand is simple: “GM is not willing to add investment in a noncompetitive facility.”

Union officials fired back that the labor dispute will continue until GM lives up to investment commitments agreed to in a 1997 local contract. The union is concerned about possible job reductions at the plant.

“There’s no compromise,” said Ruben Berks, UAW regional director in Flint, Mich., where the first of two strikes began June 5.

The nation’s top auto maker has been hit by strikes at two plants in Flint that employ 9,200 workers. The walkouts have forced the closing of 19 of its 29 North American assembly plants and scores of parts facilities, idling 79,200 workers.

Negotiations are progressing slowly. Talks recessed late Wednesday afternoon in Flint and were scheduled to resume today.

GM and the UAW normally keep a lid on public statements during labor disputes, but as tensions have increased both have mounted public relations efforts for support. This has led to some rancorous outbursts as the two sides have accused each other of distorting the facts.

On Wednesday, the UAW held a rally in Flint. Striking workers were joined by about 500 union supporters, many from out of town. At the same time, GM made Hackworth briefly available to reporters.

The labor dispute began 13 days ago when 3,400 workers set up picket lines at a stamping plant that makes hoods, fenders and engine cradles for big cars and trucks. The situation escalated a week later when 5,800 UAW members walked out of a complex that makes spark plugs, oil filters and other parts.

The disputes center on GM’s efforts to become more efficient--independent manufacturing studies have found that the Flint plants are less efficient than those of the company’s rivals--and the union’s desire to protect the jobs of members.

Hackworth said the strike at the stamping plant stemmed from the company’s efforts to end noncompetitive work practices. GM has invested $120 million in new equipment, but productivity has been held back by archaic work rules, he said.

For instance, workers in the engine cradle area operate under a quota system that allows them to stop work once their production targets are met. This means workers can put in 4 1/2 to 6 1/2 hours but get paid for eight hours of work. As a result, production lines are running at only slightly more than half their capacity, GM said.

The UAW counters that the auto maker promised to invest $300 million in the plant in exchange for work rule changes. But the union said the company has reneged on the investment commitment.

“It’s a chicken-and-egg problem,” said Sean McAlinden, labor economist at the University of Michigan.

GM said it is dedicated to ending the strikes and is willing to negotiate around the clock to reach a settlement. The UAW earlier complained that GM is dragging its feet in the talks.

There are growing fears that the strikes could last well into July. If so, they would become the worst to hit GM since 1970, when a 67-day walkout crippled the auto maker and helped send the nation’s economy into recession.

The dispute is complicated by the UAW’s national convention, which begins Monday in Las Vegas, and annual summer shutdowns that will close GM’s plants for two weeks. The company is unlikely to restart production at plants next week with the closures pending June 29.

The strikes are costing GM $50 million a day, a figure that could go higher as more plants are brought down, analysts said.

The company appears committed to a lengthy strike, hoping to take a short-term hit in profit in exchange for long-term gains in efficiency. Analysts said GM is hoping that rank-and-file support for the strikes will wane if the workers lose vacation pay during the scheduled shutdowns.

GM shares rose 88 cents to close at $69.75 on the New York Stock Exchange.