Gm Boss Spouts Hard Line Smith Won’t Approve ‘Damaging’ Settlements

General Motors Corp. won’t accept any strike settlements that damage the company’s financial health, Chairman and Chief Executive John Smith Jr. said, indicating the automaker is willing to absorb for now the costs of two continuing assembly-plant strikes.

“We must make General Motors competitive and avoid settlements that damage us for the long term,” Smith said at the company’s annual shareholders meeting in Wilmington, Del. He added that the company wants to “build constructive relationships” with labor unions.

The United Auto Workers went on strike last month at GM’s Oklahoma City and Pontiac, Mich., plants. The union wants more workers at the plants, but the company says current levels are adequate.

GM said the walkouts cost it $225 million in profit through May 15. Strikes last year cost GM $1.2 billion.

Negotiators have made little progress so far, both sides said.

“I wouldn’t have thought it would have gone on this long,” said G. Richard Wagoner, head of GM’s North American automotive business.

The Oklahoma City plant makes Chevrolet Malibu cars, one of the company’s most important new models, and Oldsmobile Cutlasses. The Pontiac plant makes full-size, extended-cab pickup trucks, among the company’s most profitable vehicles.

The Oklahoma strike hurt Malibu and Cutlass sales last month, GM said, and analysts say the company’s sales are being crippled even more this month.

GM’s total U.S. sales in May will fall below May 1996 sales, which were exceptionally strong because of pentup demand following a March 1996 strike at a GM parts plant in Dayton, Ohio, Wagoner said.