Auto Worker Strike: Job Security is Issue #1 By: MICHAEL K. BURNS

September 06, 1992

Put simply, the issue that triggered the United Auto Workers strike against General Motors is jobs: how to keep them in the face of economic arguments to the contrary, or how to control their reduction.

The walkout by 2,300 workers at the Lordstown, Ohio, metal stamping plant 11 days ago wasn't just a local dispute that got out of hand. It was chosen by the United Auto Workers union to make its point with maximum impact, striking at the automaker's best-selling models and mushrooming to idle some 35,000 employees at a half-dozen plants plus thousands of workers in non-GM supplier shops. The Baltimore plant, and its 3,200 employees turning out the popular minivans, were among the early victims.

It was a pre-emptive strike, a warning shot by the United Auto Workers union to demonstrate that it will not accept the loss of jobs to non-union employers without its consent. Taking the dramatic stand now, the union hopes to avoid a national shutdown that could result when its three-year contract covering almost 300,000 GM hourly workers expires in the fall of 1993.

Dress rehearsal it was not; the conflict was already drawn. The automaker was going ahead with plans to close its tool-and-die shop in the Lordstown plant and to "outsource" the work to cheaper, nonunion suppliers. It also wanted to run the metal stamping plant with 125 fewer workers, using nonunion skilled workers.

Labor tensions began to build last December when General Motors, the world's largest manufacturer, announced it would cut 74,000 jobs and close 21 more plants by 1995. Reeling from a loss of $7 billion in North American operations last year, and a U.S. auto market share that has shrunk to 35 percent, GM is committed to stanch the bleeding. It lost a staggering $2,000 for every car sold in the U.S. last year.

The company's notoriously high-cost parts divisions, which account for 70 percent of the car company's $50 billion annual purchases, are also a prime target for cost-cutting. GM uses a higher percentage of in-house parts than do Ford, Chrysler or the Japanese manufacturers. To get costs under control, GM is tearing up contracts and putting all parts out for new bids, choosing suppliers on on the basis of quality and (primarily) price, whether they are GM subsidiaries or not. Where those parts are made is as critical for the union, however, as it is for GM.

In other years, General Motors might have appeased the local union with a compromise so it could avoid the domino-effect disruption in production (perhaps gauging its response time by its supply of unsold autos). But this is a different era, as both union and employer recognize.

Copying the successful Japanese system, GM has introduced just-in-time supply deliveries that minimize costly inventories and space, allowing production flexibility. When the Lordstown stamping plant went on strike, work on more than a dozen GM models had to come to a sudden halt. Importantly, GM failed to copy the Japanese corollary, to have more than one supplier of the same part.

The personal political equation is also different this time, with two leaders on the make. GM's new president, John F. Smith Jr., is under intense pressure from the corporate directors to make mandated cuts and not to reopen debate on the issue. On the other side, UAW's leader, Stephen Yokich, is bidding to become the next UAW president and is equally unwilling to back down. The failed five-month strike at Caterpillar, which ended this year when workers returned to nothing but their jobs after the company moved to hire replacements, hangs heavy over the union vice president as he duels with GM.

But using replacement workers in the event of a widespread strike at GM is not in the cards. The union and company are too closely tied together, the process too complex. The system is no Caterpillar, where UAW power is not so intricately embedded.

Losing jobs to outside contractors is the main concern of the union. Despite the rallying cry of job security, the UAW is grudgingly resigned to losing GM plants and jobs in response to declining sales. It differs with the automaker on how, and by how much, that reduction should happen. For example, GM and the UAW last week settled such a dispute at the Lordstown assembly plant that makes Chevrolet Cavaliers -- not the striking metal stamping plant -- by securing 600 American jobs that could have been lost to a Mexican GM facility.

That agreement indicated some bending on the issue by General Motors. But outsourcing, or shifting Auto Workers jobs to nonunion shops, remains the hot issue. The right to strike over such work transfers is high on the union's bargaining list for next year's contracts with the Big Three automakers. But the issue is happening now. The union has reason to fear that many of its members' parts-making jobs could be lost by such moves before 1993 contract talks even begin.

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