GM says parts subsidiaries at risk as UAW talks loom

June 12, 1993|By New York Times News Service

DETROIT -- General Motors Corp. could close or sell some parts-making subsidiaries unless it gains concessions on wages from the United Automobile Workers in contract talks, a top company executive said yesterday, sketching out the company's bargaining stance before the contract talks begin on June 23.

Since those subsidiaries, which make products like bearings and axles, generally compete against companies that are not organized by the UAW, GM pays up to 50 percent more in wages than its competitors, driving up its costs of production, said the official, who outlined GM bargaining goals for reporters on the condition that he not be identified.

The Big Three automakers and the union have already begun a ritual exchange of signals to lay out bargaining priorities. The current three-year contract expires in September.

Besides wages for parts makers, the official said, GM intends to focus on three areas: job security, health care and pension benefits. As GM plants improve their efficiency, the company will need to shed more workers, he said.

In addition, he said, GM is likely to face an unfunded pension liability of $19 billion by the end of the year. He also said health benefits for workers averaged about $1,500 a vehicle, far more than at Ford or Chrysler.

UAW officials declined to comment yesterday but have made it clear in recent weeks that they intend to hold the line on wages, job security and benefits.

"We not only don't intend to back up," Owen Bieber, the UAW president, said in April, "we have every intention of moving forward."

In all, the union represents about 900,000 people, down from 1.5 million in 1979. Half are auto workers.

Another likely bone of contention during negotiations is a Jobs Bank created in the current contract. Through the bank, laid-off workers continue to draw their wages, but GM, which has said it will shut 23 plants, exhausted its $3.35 billion contribution to the fund on March 1. The union wants GM to replenish it.

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