GM pushes job changes
ORION TOWNSHIP -- Contract talks between Detroit automakers and the
United Auto Workers don't officially begin for months, but critical
battles already are under way at General Motors Corp. plants around the
GM is pushing UAW locals at its factories to agree to money-saving work
rule changes -- from reduced break time to more leeway to outsource jobs
-- that mirror policies in plants run by foreign competitors, especially
Toyota Motor Corp.
Ford Motor Co. was able to put such so-called competitive operating
agreements in place with relative ease in more than three dozen of its
U.S. plants, but GM is having a much tougher time convincing the UAW.
The stakes are high in these plant-by-plant battles because they could
signal how agreeable the UAW will be to concessions to secure future
work during national contract talks, which begin in earnest in July. GM
wants to set a tone early that it won't tolerate money-wasting
practices, and the union doesn't want to come across as quick to forgo
hard-won safeguards in the workplace.
"This is the beginning of hardball," said David Cole, chairman of the
Center for Automotive Research in Ann Arbor. "The basic message from GM
is, 'We're not going to do products where they're not profitable.'"
GM has been working for years to put more flexible work rules in place
at its plants. The company won't say how many factories have such
agreements, but officials have acknowledged progress has been far slower
than they'd like.
GM has made strides over the years in getting the union to implement
money-saving practices, and the automaker already has some of the most
efficient plants in the United States. But it's looking for broader,
more comprehensive changes.
"We have to look for ways to close the competitive gaps," GM spokesman
Dan Flores said.
GM loses an average $1,300 on each vehicle it makes in North America,
while Toyota Motor Corp. makes about $2,100 on each car and truck built
here, according to data from the Center for Automotive Research that is
often cited by GM.
At issue are work rule changes both big and small that experts say could
save hundreds of millions of dollars annually if implemented companywide.
GM, for example, could save money by paying overtime after a worker puts
in more than 40 hours a week, rather than after eight hours in one day.
Less break time and rules that crack down on absenteeism also are likely
on the automaker's wish list. Other key goals: fewer job
classifications, which would improve flexibility by allowing workers to
do more than one job, and the ability to outsource more
Such rules are already in place in U.S. plants operated by foreign
competitors, most of which are in the South and staffed by nonunion
labor. "The competitor defines the game," Cole said, "and Toyota is the
Orion may be next target
The first signs of discord at GM came last month, when fighting over
work rule changes temporarily stalled talks to bring new vehicles to
plants in Kansas City, Kan., and Lordstown, Ohio.
Both plants produce small cars that have historically been money losers
for GM. Top UAW officials interceded in the negotiations, ordering local
union leaders to stop talking to GM.
The automaker responded by calling off work to prepare the plants for
future vehicles, sending the message that without a competitive
operating agreement, the plants could lose work.
Meanwhile, at the former Saturn plant in Spring Hill, Tenn., GM has
secured a work rules deal after promising workers they would get to
build a new Chevrolet crossover SUV. Workers in Spring Hill were
desperate for a new product after GM canceled plans to build a minivan
GM's likely next target for a deal is its sprawling Orion Assembly plant
in Oakland County, where the automaker has secured local tax breaks that
often come with the promise of a new product investment.
GM makes the Pontiac G6 in Orion and is considering bringing production
of the new Malibu sedan there if demand exceeds capacity at Kansas City,
which will be the primary production site for the Malibu. It goes on
sale later this year.
Union leaders wouldn't comment on negotiations, saying only that members
haven't yet seen GM's proposal for a competitive operating agreement at
Orion. But some workers say GM will face resistance to new work rules.
"Most of the people here have upwards of 20 years in," said Orion worker
Terry Davis, who's worked at nine plants in his three decades with GM.
"They're not going to give anything up."
National leaders fight deals
While Ford hammered out deals with local UAW leaders, GM is finding its
efforts thwarted by national union officials.
The UAW wants to prevent local leaders from cutting deals that will
secure new product at their factory at the expense of the larger work
force, said Harley Shaiken, a labor expert at the University of
"Dangling product has much more consequence now -- there are more plants
than products," Shaiken said."
"But the union has said, 'We're aware of this, but we're not going to be
While GM has the obvious leverage of holding back work, the company also
needs the cooperation of the UAW to mount a successful turnaround,
Local UAW leaders say they're aware of the urgency surrounding GM's
cost-cutting -- and how important it is for them to secure new products.
"The bottom line is that the membership is working to get a new product
here," said Jim Graham, president of UAW Local 1112, which represents
Lordstown workers. "We know how important new product is to the survival
of our plant."