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Brake Strike Idles More GM Plants

March 12, 1996

DAYTON, Ohio (AP) _ A week-old strike at two General Motors Corp. brake factories continued to strangle the world’s largest automaker Monday, closing half the company’s North America assembly plants and idling thousands of workers.

There were indications that talks with the United Auto Workers had stalled. No progress was reported over the weekend and no new talks were scheduled, GM spokesman Jim Hagedon said. Local 696 President Joe Hasenjager said the strike ``could be a long one.″

David Healy, a financial analyst with the New York-based Burnham Securities, said GM could lose $250 million a week if all of its 29 car and truck assembly plants in North America are idled. The automaker earned $6.9 billion in 1995.

``It just gradually cascades up to that point,″ Healy said.

GM spokesman Tom Klipstine in suburban Detroit, would not comment on a report in the local newspaper, The Oakland Press, that virtually all of GM’s North American assembly plants may have to close by Wednesday if the strike continues.

Investors appeared to shrug off the effects of the strike Monday, boosting GM’s stock by $1.75 a share to $56.62 1/2 on the New York Stock Exchange.

When the strike began, GM had an 82-day supply of passenger cars, and a 79-day supply of trucks, Klipstine said. The vehicle supply is critical in determining how long it would take for the strike to affect consumers. The industry generally considers a 60-day supply ideal.

Since the 3,000 members of United Auto Workers Local 696 walked off the job at Delphi Chassis Systems in Dayton on March 5, GM has been forced to shut down 15 North American assembly plants and six parts plants.

Another 12 of roughly 200 GM parts plants in North America have been affected, with some workers being sent home but production continuing. In all, about 60,000 workers have been idled by the strike.

Late Monday, union officials said workers at an assembly plant in Oklahoma City were idled and Delphi spokesman Bryan Gibson said about 20 percent of the workers at a generator plant in Anderson, Ind., would be idled beginning Tuesday.

The Delphi Chassis workers struck over safety and job security issues. The plants supply brake systems and parts to nearly all of GM’s assembly plants.

The major issue in the dispute is outsourcing, the production of parts by outside plants or companies. The union fears it could permanently cut jobs at the Dayton plants.

Hagedon, the spokesman based in Dayton, said GM sometimes must buy less expensive parts from outside sources.

``We don’t see how we can sell cars competitively if those cars aren’t made with parts that are priced competitively,″ he said.

The union also complained about staffing levels it says has caused overtime and prevented workers from completing safety training. Dayton workers make an average of $69,000 a year in salary and overtime.

Hagedon said overtime is voluntary and that worker safety training should be caught up by the end of the year.

Meanwhile, a UAW leader at GM’s Lordstown assembly plant said the 4,500 workers there are prepared to strike after the Dayton walkout is settled.

Al Alli, shop chairman of UAW Local 1112, said Sunday the issues at Lordstown are the same as those in Dayton. The Lordstown plant was idled last week by the Dayton strike.

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