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Striking out en route to…
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July 9, 1998: 5:19 p.m. ET
As end of GM summer shutdown nears, UAW leader sees no quick labor accord
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NEW YORK (CNNfn) - General Motors executives and striking union workers swear they are eyeball-to-eyeball at the bargaining table, toiling into the wee hours to find a way out of the monthlong labor strife that has reduced production at the nation's largest automaker to a chassis of its normal self.
Yet judging from the combatants' latest appraisals of their talks, one may be forgiven for wondering whether they are talking across a soundproof wall.
The stream of status reports emanating from the negotiating frontlines outside a Holiday Inn hotel in Flint, Michigan Thursday ranged from the fanciful to the forlorn, from the cautiously sanguine to the completely sapped.
"I'd be shocked if it was done by this weekend," said Richard Shoemaker, the vice President of the United Auto Workers, shortly after meeting with his counterpart at GM, Gerald Knechtel. Talks with negotiators for the 9,200 striking workers had resumed Thursday morning.
Reuters news service reported Knechtel had been seen leaving the hotel at around 11 a.m. EDT Thursday, suggesting that the talks had not resumed after adjourning the previous evening.
Yet when asked by reporters whether he thought the talks could be resolved promptly, Knechtel replied: "I think we still can, yes."
At the same time, a UAW regional director, Cal Rapson, was quoted as saying the union and GM had reached a framework for a settlement.
"The company knows what it takes to settle," Rapson said at a news conference in front of picketing workers at the Flint Metal Center, one of two striking GM plants. "It's up to them. It could be a day or two, or go a couple weeks. There is no magic time to get it done."
But analysts and Wall Street watchers say there is - and that time is now, before the automaker ends its two-week model-changeover shutdown on Monday.
The loss ticker begins again Monday
If an agreement can be reached by Thursday or Friday, experts say, it would allow time for the striking workers to ratify any pact over the weekend. In theory, workers could then resume their jobs on Monday, before GM begins racking up further losses beyond the $1.18 billion incurred before the shutdown.
But in practice, even after the reopening of the plants, GM would need at least another two weeks to replenish its parts pipelines before revving up to healthy production levels at its 26 strike-idled assembly plants across North America. Analysts say production may not get back into swing until the end of July or later.
Despite the intensive efforts, however, the bar remains high for any settlement, with GM and the workers fundamentally divided on issues of local productivity and staffing.
Such concerns were foremost on labor leaders' minds when 3,400 workers represented by UAW Local 659 walked off their jobs at GM's metal-stamping plant in Flint on June 5. They were joined on June 11 by 5,800 peers from UAW Local 651 at the nearby Delphi East diversified parts plant.
The strikes have idled nearly 170,000 workers, including the 9,200 strikers.
Workers at the metal-stamping facility accused GM of backing down on promises to invest $300 million in upgrades to the plant. Union leaders also pointedly charged the giant automaker with engaging in an "America Last" strategy, an allusion to GM's avowed campaign to slash its workforce by as much as 22 percent, and "outsource" jobs to other, presumably cheaper, suppliers.
GM has framed the issue in terms of a Darwinian-style battle of the automotive fittest: unless it follows the streamlining lead of its slimmed-down rivals, Ford Motor Co. and Chrysler Corp., the company will flounder in the next century.
The planned closing of two former GM factories also has slowed settlement talks, adding a further stumbling block, officials told reporters.
The union is apparently concerned about further plant sales by GM's parts-making unit, Delphi Automotive Systems, the largest auto-parts maker in the world. Closing the two plants, which GM sold in 1996, would idle 1,200 UAW members.
GM has been positioning the Delphi facility for a partial public spinoff -- a move the UAW is keen on blocking. The UAW and GM struck an agreement a year ago under which the automaker may sell up to 20 percent of the plant; Shoemaker said any attempt by GM to spin off larger chunks of the facility could trigger "a hell of a battle."
End of shutdown an "artificial deadline"
Shoemaker told Reuters Thursday that he believed it is "conceptually" possible that a settlement will be struck soon. But he cautioned that a lot of ground remains to be covered. He called the end of the summer shutdown an "artificial deadline."
Analysts say GM is intent on wresting a settlement from the UAW which includes some commitment by disgruntled workers not to strike other parts plants. Otherwise, they argue, any agreement will only be a piecemeal solution to the broader problem of frequent breakdowns in the production cycle.
In 1996, a strike at two brake plants in Dayton, Ohio cost GM $900 million and paralyzed almost its entire North American operation. Parts plants in Dayton, Warren, Mich., and Indianapolis are threatening to strike in the near future.
Industry observers say GM must cut 45,000 to 50,000 jobs to remain viable in the future. GM has said throughout the current strike that it might close car factories and discontinue certain models as it attempts to shift to higher-profit sport utility vehicles and pick-ups.
Charlotte Grim, a GM spokeswoman, said Thursday that the end of the model-changeover period had lent a sense of urgency to the talks. But she declined to comment on the substance of the negotiations.
"There's a lot of energy around trying to get this settled," Grim said.
Shares of GM (GM) closed down 2 points at 71-3/16 Thursday in composite trading on the New York Stock Exchange.
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