Strike Could Shut Down GM Car Factories

[doh]

http://biz.yahoo.com/ap/080327/ameri...abor.html?.v=3

DETROIT (AP) -- The increasingly bitter monthlong strike at auto parts maker American Axle and Manufacturing Holdings Inc. is starting to hit General Motors Corp. where it hurts.
Two GM factories that make cars in Michigan and Ohio soon will be affected by the strike, which already has fully or partially shut down 28 GM plants in the U.S. and Canada due to parts shortages.

GM confirmed Thursday that the strike will force it to idle the Detroit-Hamtramck assembly plant after Friday's lone shift, and a local union president in Lordstown, Ohio, said Thursday that his complex will be shut down on April 4.

Previously the strike had affected only plants that assemble or supply parts for slow-selling pickup trucks and sport utility vehicles.

But GM spokesman Dan Flores said Thursday the Detroit-Hamtramck plant, which makes the Buick Lucerne and Cadillac DTS sedans, is nearing the end of its parts supply from American Axle.

"Employees have been notified that we anticipate we are going to run out of parts sometime late in the shift on Friday, Flores said.

Closing the Lordstown complex, which makes the Chevrolet Cobalt and Pontiac G5 small cars, could hurt GM the most since the cars are selling well due to high gasoline prices.

Through February, the Cobalt, which gets up to 33 miles per gallon of gasoline on the highway, saw sales rise more than 43 percent when compared with the first two months of last year, according to Autodata Corp. G5 sales are up nearly 19 percent.

DTS and Lucerne sales are down nearly 20 percent for the same period.

"Once we go down, it should start affecting the dealers very fast," said Jim Graham, president of UAW Local 1112 at the Lordstown assembly plant near Youngstown.

Graham said GM is running out of a small brake part for the Cobalt and G5 that is made by American Axle. The shutdown likely will affect 3,750 workers at the Lordstown complex and nearby parts suppliers, he said.

"Hopefully they resolve their issues and we get back to work and build cars," Graham said. "We're good at that."

GM workers will get unemployment benefits as well as supplemental pay from the company if the factories are shut down.

Flores wouldn't comment on the status of the Lordstown plant.

Industry analysts and dealers say GM still has an ample supply of pickups and SUVs despite the strike. But the company had only a 53-day supply of Cobalts at the end of February, low by industry standards, according to Ward's AutoInfoBank.

Diane Elnick, industry analyst for the WardsAuto.com Web site, said GM is feeling the impact of the strike now because it is paying wages to workers who aren't producing vehicles.

The company had such a stockpile of trucks and SUVs that the strike didn't affect sales, but if the Lordstown plant is idled, it will come at a time when demand is high for the Cobalt and other small cars.

"Up until now they've had high inventory of these vehicles. Certainly I'm sure if Lordstown goes down, they'll feel it," she said.

About 3,600 UAW workers at five American Axle plants in Michigan and New York walked off their jobs Feb. 26 in a wage and benefit dispute.

There were signs on Thursday that the strike could last far longer.

Richard Dauch, American Axle's chairman and CEO, warned in a Detroit Free Press report that the company has the ability to move work now done in the U.S. to foreign factories. American Axle has plants in Mexico, Brazil, Europe and Asia.

[FenwickHockey65]

[TheGeneral]

negatives

1. People not working
2. Lack of cobalts which is kinda popular because of gas prices.

[Uzzy]

Maybe the slowing Cobalt/G5 production will boost sales of the Astra. I'm not too worried about the Lucerne and DTS at this point. Way to go UAW, putting more of your members out of work.

[TheGeneral]

Originally Posted by Uzzy

Maybe the slowing Cobaly/G5 production will boost sales of the Astra. I'm not too worried about the Lucerne and DTS at this point. Way to go UAW, putting more of your members out of work.

Cobalt has some incentives and is cheaper then the astra. But the UAW is stupid the economy is a little slow and there putting over 10,000 people out of work directly.

[Joevette]

GM needs some vertical integration and should be making these parts for itself, not relying on some greedy third party supplier

[mrfunji]

Originally Posted by doh

http://biz.yahoo.com/ap/080327/ameri...abor.html?.v=3
GM workers will get unemployment benefits as well as supplemental pay from the company if the factories are shut down.

Sounds like they are getting paid more not to work. That's lovely ... :

[98sonoma]

Glad someone is getting paid...my company is still laying off more employees and running limited production thanks to the strike...along with a couple of Ford and Chrysler plants going down for a week or so. It sure sucks to be a supplier right now.

Originally Posted by mrfunji

Sounds like they are getting paid more not to work. That's lovely ... :

[Nightshark]

"Richard Dauch, American Axle's chairman and CEO, warned in a Detroit Free Press report that the company has the ability to move work now done in the U.S. to foreign factories. American Axle has plants in Mexico, Brazil, Europe and Asia."


Well, if the strike continues I would say they have no choice but to move the work to foreign factories. I hate to see it as I do not want the US to lose any more jobs but I cannot blame them if they start sourcing the work to factories in other countries. I am personally against strikes especially during times as these when so many people are struggling to keep or find jobs. I feel they do much more harm than good for everyone involved. If you cannot produce parts for your customers (GM, Ford, etc...) then at some point they will no longer be your customers. This strike has far reaching ramifications for many other companies and American Axle will be forced to do whatever they need to in order to get production back under way soon. Unfortunately the outcome may mean a lot of union people losing their jobs entirely as a result of striking.

[CaptainDan]

Originally Posted by Joevette

GM needs some vertical integration and should be making these parts for itself, not relying on some greedy third party supplier

Because the UAW would never strike a GM owned plant?

[gardnet1]

If I was American Axle, I would list product lines and the drop dead date for shutting them down and shifting the to low cost countries. Once the point of no return is reach and one or production lines are sacrificed the uaw will realize that they need get their arses back to work and be team players.

American Axle could also sweeten up the buyout offers, so that legacy workers with higher wages will be enticed to leave the company and a second tier wage implemented (all future hires come in at the lower wages, not just a percent).

[CountryME]

Although it doesn't mention what brake part specifically would shut down the line, it seems that most brake parts are available aftermarket. Couldn't the General just line up an aftermarket company to produce the part that they would normally produce for autopart stores and keep the line moving?

[Uzzy]

Originally Posted by CountryME

Although it doesn't mention what brake part specifically would shut down the line, it seems that most brake parts are available aftermarket. Couldn't the General just line up an aftermarket company to produce the part that they would normally produce for autopart stores and keep the line moving?

I was just discussing this with a collegue of mine. They can't do that because the aftermarket parts are held to a much lower standard. The testing is lower, the materials are often cheaper, the processes are different where possible to cut costs. There would be warranty issues to deal with for a long time, I don't see them going to aftermarket suppliers.

[Whitesky]

Time for AA to move those factories!

[CadiEldo67]

I'm going to have to say that I'm all for people striking to get better pay, better vacation, whatever, but what about job security? These people have proven that they aren't reliable, and that they probably aren't the kind of people that American Axle should be employing. And not only are they hurting their company, where they work, they are hurting GM and other car companies, I'm sure. I'm not saying that every person that walked out should never have a job again or anything, but I wonder what they are thinking. It isn't going to do much more than help the economy slow down even further.

And on a better note, hopefully GM can counterbalance the Cobalt/G5 shortage with the new Pontiac Vibe and Saturn Astra, as they are new to the segment, and would most likely have a better chance at being purchased.