UAW Adds Pressure, Strikes 2nd GM Plant

The United Auto Workers increased pressure Thursday on General Motors Corp. when a Flint parts plant went on strike, raising the prospect that GM’s entire North American production could be halted by next week.

The strike at the Delphi Flint East complex is the second by a UAW local against GM in the last week. On June 5, workers at a Flint stamping plant walked out in a dispute over work rules, factory conditions and job security.

The strike at the stamping plant, which makes hoods and fenders, has already closed eight of GM’s 32 assembly plants and curtailed operations at 16 parts plants and other facilities in the U.S., Canada and Mexico.

About 9,200 union members are on strike and an additional 25,000 have been idled in other plants because of parts shortages.

The dispute also is spreading to GM suppliers. For instance, Lear Corp., which makes seats and interiors, has closed four plants and laid off 1,025 workers.

Talks were held Thursday at both Flint plants, but no progress was reported before negotiators retired for the evening. Talks were expected to resume today.

The strike at the Delphi plant, which makes speedometers, spark plugs, filters and other parts, could quickly be felt throughout GM’s assembly operations since it ships parts to nearly every plant.

Jack Kirnan, an analyst for Salomon Smith Barney in New York, said the strikes’ effects are “likely to grow, threatening shutdown of the entire company by the end of next week.”

GM shares fell $2.44 to close at $70.25 in trading Thursday on the New York Stock Exchange as some analysts lowered their earnings estimates for the nation’s No. 1 auto maker.

The company is vulnerable to labor pressure because it uses a just-in-time inventory system, an efficient process that requires suppliers to ship parts to the assembly line as they are needed.

Analysts said the effect of a combined strike could be greater than that of a 1996 strike at two Dayton, Ohio, brake plants because GM’s vehicle inventories are leaner. The Dayton strike lasted 17 days and virtually shut down GM’s North American production, idling about 175,000 workers and costing the auto maker about $900 million in profits.

The current strikes come as auto sales have been robust and GM was regaining market share. If they continue for several weeks, the strikes could have a small, short-term effect on the national economy.

David Littman, chief economist for Comerica Bank in Detroit, said a strike that lasts several weeks could reduce the nation’s gross domestic product by 0.1% to 0.2%, but lost production would likely be made up later.

The latest strikes were prompted by union opposition to an aggressive GM productivity drive that the auto maker says is essential to improving its global competitiveness.

The company, which earned $6.7 billion last year, has shown a willingness to take short-term hits to profits in order to impose efficiency changes in its uncompetitive factories.

GM has gone through a painful restructuring in recent years. Since 1985, it has cut the number of unionized hourly workers from 435,000 to 223,000. Analysts say that GM wants to reduce it below 200,000 in the next few years.

The downsizing has been hard for the UAW to swallow. The union, one of the nation’s most powerful, has lost half its membership in the last two decades. It has authorized 13 local strikes against GM in the past three years.

The strikes are primarily over job security and efficiency issues.

Times wire services contributed to this story.