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Tally for Affected GM Plants Reaches 29 as American Axle Strike Continues
10 Mar 08
Talks are proceeding, but lack of an agreement is slowing vehicle and component production across the continent.
Global Insight Perspective | | Significance | GM has released information indicating that the UAW strike against supplier American Axle has now idled or slowed production at 29 facilities across North America. The automaker is reportedly losing production equivalent to 18,300 vehicles per week. | Implications | The strike is affecting assembly plants and now component plants as well, and has impacted suppliers as well. Both sides resumed negotiations late last week, but no resolution or progress in the talks has been reported as of Sunday (9 March) evening. | Outlook | A turning point is coming in the ongoing strike saga: when it reaches the two-week point later this week, workers will be put on strike pay from the union, a sum of US$200/week. Trying to support a family on such an amount in an economy thought to be sliding into recession may indeed be a powerful motivator for union officials to come to an agreement, but perhaps not more powerful than GM losing significant production volume. |
Talks continued straight through the weekend between supplier American Axle Manufacturing (AAM) and the striking United Auto Workers (UAW) union, but as of late Sunday (9 March) evening, still no resolution had yet been found between the two parties. As a result, the 3,600 workers at American Axle continue their strike, now stretching into its second week, and General Motors (GM) has announced another round of assembly and component plants scheduled either for shut-down or slow-down. As of Sunday night, 29 GM facilities were to be affected by the strike, with over a third of GM's 80,000 hourly employees either operating on slower schedules or laid off from their jobs. GM Facilities Affected by American Axle Strike, 3/10/08 | Facility & Location | Status | Vehicle/Component | Pontiac (Michigan) Assembly | Idle since 28 Feb | Full-size pick-ups | Flint (Michigan) Assembly | Idle since 29 Feb | Full-size pick-ups, medium duty trucks | Oshawa (Ontario) Assembly | Idle since 29 Feb | Full-size pick-ups | Fort Wayne (Indiana) Assembly | Idle since 29 Feb | Full-size pick-ups | Moraine (Ohio) Assembly | Idle since 3 March | Mid-size SUVs | Mishawaka (Indiana) Assembly | Idle since 4 March | Hummer H2 SUV | Toledo (Ohio) Transmission | 4-speed trans line idled 10 March | four-speed transmissions | Janesville (Wisconsin) Assembly | Short shifts begin 10 March | Full-size SUVs | Saginaw (Michigan) Casting | Idle beginning 10 March | Truck engine castings | DMAX (Ohio) | Idle beginning 10 March | 6.6-litre Duramax diesel engines | Wentzville (Missouri) Assembly | Idle since 6 March | Full-size vans | Flint (Michigan) South Engine | Partial shutdown, 10 March | I-5, I-6, HF V6 engines | Romulus (Michigan) Engine | Idle beginning 10 March | V6 & V8 engines | St. Catharines (Ontario) Engine & Component | Partial shutdown, 10 March | V8 engines, components | Baltimore (Maryland) Transmission | Partial shutdown, 10 March | Traditional heavy-duty transmissions | Bay City (Michigan) Component | Partial shutdown, 10 March | Engine & transmission components | Bedford (Ohio) Casting | Partial shutdown, 10 March | Pistons & transmission components | Defiance (Ohio) Casting | Partial shutdown, 10 March | Engine, cylinder head, crankshaft castings | Fredericksburg (Virginia) Components | Partial shutdown, 10 March | Transmission components | Parma (Ohio) Components | Partial shutdown, 10 March | Transmission components | Willow Run (Michigan) Transmission | Partial shutdown, 10 March | 4- and 6-speed transmissions | Ypsilanti (Michigan) Transmission | Partial shutdown, 10 March | 4- and 6-speed transmissions | Tonawanda (New York) Engine | Partial shutdown, 10 March | Engines & components | Flint (Michigan) Stamping | Partial shutdown, 10 March | Stamped components | Grand Rapids (Michigan) Stamping | Partial shutdown, 10 March | Stamped components | Indianapolis (Indiana) Stamping | Partial shutdown, 10 March | Stamped components | Mansfield (Ohio) Stamping | Partial shutdown, 10 March | Stamped components | Marion (Indiana) Stamping | Partial shutdown, 10 March | Stamped components | Parma (Ohio) Stamping | Partial shutdown, 10 March | Stamped components |
Trade publication Automotive News reports that the company is losing 18,315 units of production every week as the strike continues. No progress was announced since the parties went back to the negotiating table on Thursday (6 March) at noon, although both parties are known to have continued negotiations through the weekend. The two sides are reportedly far apart on issues of wage cuts. Outlook and Implications This list of plants is likely only the tip of the iceberg in terms of facilities facing slowed production or idling; dozens of suppliers also service these GM plants. The ripple effect through the auto industry's supply base as production of several of the most voluminous vehicle platforms grinds to a halt for nearly two weeks is expected to weigh heavily on a supply base already reeling from increased energy and commodity prices, lower production expectations from GM, and labour costs which are increasingly uncompetitive in the modern global environment. But two important factors begin to come into effect this week, as the strike continues to shut more and more facilities. First is the two-week cut-off limit before the striking UAW members begin to go on union-funded strike pay. Instead of collecting regular hourly pay, employees begin taking in US$200/week in strike pay, considerably less than they earn in normal wages. The combination of much lower pay and an economy increasingly showing signs of recession and job losses may prove to be a strong motivator for UAW members to come to a settlement. The other factor occurs on the manufacturer side of the equation; losing 18,000 units of volume a week is no small matter for GM, despite the sizeable inventory of trucks in stock. Losing two weeks' worth of production is likely approaching the limit of GM's tolerance, and unless an agreement is reached some time this coming week, there will be increasing pressure from the automaker (and its suppliers) on both the UAW and American Axle to come to a settlement.
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