At Saturn, teamwork loses luster Falling sales and pay disappoint workers

Auto industry

February 17, 1998|By BLOOMBERG NEWS

DETROIT -- United Auto Workers members at General Motors Corp.'s Saturn plant in Tennessee, where pay is falling because of slow sales, could soon scrap the innovative labor teams that are part of the unit's folksy advertising image.

Saturn is unique within GM because of its extensive use of team-based labor groups, which give workers more responsibility for monitoring quality and costs. More than 6,000 workers in Spring Hill, Tenn., will decide Feb. 23 on whether to schedule a referendum on changing to a traditional contract.

A change could be a setback for Saturn, which tries to capture sales from Japanese imports by marketing itself heavily as a "different kind of car company."

Saturn sales in January fell 20 percent to 14,621 from the year-earlier period, resulting in less overtime pay and lower bonuses.

"People who bought Saturns bought what the company is about, and the labor-management partnership was part of that," said local union official Mike Bennett, who prefers the team concept but says he'll support whatever the members want. "GM's interference with the way we do things down here is really handicapping us."

About 500 Saturn workers rallied last week at a local high school to support a traditional UAW contract, saying the team arrangement creates problems with job assignments, pay and other issues. Bennett, bargaining chairman of UAW Local 1853 at the plant, blocked a similar proposal five years ago but now says the change is likely to occur.

"We tried the team concept here," said Richard Benevides, 48, a seven-year Saturn worker who plans to vote for a traditional contract. "It doesn't work."

Last fall, Saturn cut extensive overtime at the Spring Hill plant to reflect lower demand. Workers' income was also reduced by smaller bonuses, which are tied to profits, quality, productivity, training and other benchmarks. In 1996, Saturn workers earned about $4,000 more than other GM workers, but in 1997, they earned about $4,000 less, Bennett said.

Under a traditional labor agreement, a drop in sales doesn't mean a cut in wages, said Alan Baum, director of forecasting for IRN Inc. in Grand Rapids, Mich. "This has been an issue for a while," he said.

Another issue, Baum said, is GM's push to build all its small cars from the same basic vehicle platform. GM wants to build Saturns on the same platforms as some Chevrolet and Opel small cars. While that saves money, Baum said it could eventually cut production at Spring Hill by making it possible to build the cars elsewhere.

Bennett said he didn't know how a change would affect the plant's operating methods.

Greg Martin, a Saturn spokesman, declined to comment on the UAW vote. However, he said Saturn's "unique partnership" with the union remains intact.

Pub Date: 2/17/98

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