Strike May Shut Down Gm Vehicle Production May Stop Soon As Walkout Closes 21 Of 29 Plants
General Motors Corp., the nation’s largest company, neared a total shutdown of its car and truck production Tuesday as seven more assembly plants were closed because of a strike at two factories that make brakes for most of its vehicles.
Twenty-one of GM’s 29 North American assembly plants have halted production, and work has been curtailed at 30 parts facilities. More than 80,000 workers have been affected, and company officials said all vehicle production could be halted nationwide within a day or two.
The eight-day strike already has become the most crippling labor action at GM since 1970, when a historic nationwide United Auto Workers walkout shut down the company’s U.S. operations for 67 days and helped drive the nation into recession.
No formal negotiations have been held since Thursday, but a GM spokesman said bargainers from its two Delphi Chassis Systems brake plants in Dayton, Ohio, and UAW Local 696 agreed to resume talks Tuesday night.
The fast-spreading work stoppage comes as the nation’s economy appears to be growing only grudgingly and auto sales are lackluster. The walkout already has had a slight adverse impact on the nation’s economy.
Economists predict the lost auto production to date will knock off about a tenth of a percentage point from the gross domestic product in the first quarter.
“It will have a slight dampening effect on the already sluggish economy,” said David Littman, senior economist for Comerica Bank in Detroit. The strike, however, would have to last a month or more to have a lasting impact, analysts said.
The dispute also brings into focus the growing national debate about corporate downsizing, job insecurity and falling living standards for many middle-class Americans.
The Dayton strike revolves around GM’s attempts to send more component work to outside suppliers, a practice known as “outsourcing.” The company argues its unionized workforce cannot make certain parts as cheaply or efficiently as some independent contractors. But many workers, who have sought to cooperate with GM’s cost-cutting efforts, say enough is enough.
“I think that because of all the outsourcing that they’ve done it’s about time that we stand up and say it’s enough,” said Dee Byers, a production line worker at a GM assembly plant in Kansas City, Kan. “We need to fight for our jobs.”
GM has given in on several similar local strikes in the past three years rather than lose production. But the company is stronger financially today, and some observers said the No. 1 automaker may be taking a stand.
“This is the most important issue facing the industry,” said David Cole, executive director of the University of Michigan’s Office for the Study of Automotive Transportation. “This could be a watershed strike.”
“GM wants to settle this issue and put it behind them,” Cole said. “I wouldn’t be surprised if this goes on for several weeks.”
The widening strike is creating financial hardship for workers, the company and its suppliers. GM deals with more than 1,600 supply companies, and many have been forced to furlough workers or switch them to other work. No figures were available on how many supplier layoffs have already been ordered.
The industry is split on whether this strike will be a lengthy one. One train of thought is that GM has no choice but to settle quickly or risk losing sales and market share to competitors.
But others believe that GM is in for the long haul because it is intent on settling the outsourcing issue before the start of negotiations in September with the UAW on a new three-year labor agreement.
On Tuesday, the company was forced to shut down truck plants in Linden, N.J.; Oshawa, Ontario; Flint, Mich., and Baltimore; and car plants in Kansas City, Kan., Oklahoma City and Arlington, Texas. The company expects more to close in the next two days.
“By the end of the week, we could be out of the business of making cars and trucks,” said GM spokesman Gerry Holmes.