GM is digging in:
"Strikes force GM to re-evaluate programs"
Strikes force GM to re-evaluate programs
DETROIT (Reuters) - General Motors Corp., digging in for a long
hot summer of labor unrest, said Tuesday it is re-evaluating all
of its North American product programs and cutting back on
non-essential spending.
In a letter sent to top managers, GM North American Operations
President G. Richard Wagoner said the company's core North
American automotive unit plans to cut by half its discretionary
expense items. Areas affected include overtime, outside
consultants, cellular telephone use and non-product-related
capital spending.
"This labor dispute is having a major impact on our company,"
Wagoner said in the letter. "As a first step, we are looking to
reduce expenditures that don't impact our future product
programs."
But in a sign of how far-reaching the walkouts by 9,200 hourly
workers at two parts plants have become, GM said it is
re-examining its car and truck program spending.
"... We are looking at all other categories of expenses to ensure
that all cash-conservative opportunities are identified," Wagoner
said. "Likewise, NAO is re-evaluating all of its product programs
to ensure that, after settlement, the remaining cash is deployed
to the most important products."
Talks resumed Tuesday at the two Flint, Mich., parts plants, but
there were no reports of progress. About 3,400 United Auto
Workers union members from Local 659 have been off the job since
June 5 at the Flint Metal Center stamping operation in a dispute
over future investments and work rules.
Another 5,800 members of UAW Local 651 are on strike at the
Delphi East plant, where GM makes instrument clusters, spark
plugs and other parts. That strike began June 11 over GM's plans
to shift work out of the plant to outside suppliers.
Wall Street analysts have estimated the strike could be costing
GM up to $75 million a day. Total losses since the walkouts began
could hit $1 billion by the Fourth of July weekend.
Company officials said last week the firm was looking for ways to
conserve cash. GM had earlier said it was on track to chop $4
billion in costs in 1998. GM, the world's largest automaker,
finished the first quarter with $13.6 billion in cash, down from
$14.6 billion.
At Delphi Automotive Systems, GM's auto supply business,
cost-saving measures have also been implemented, spokeswoman
Karen Healy said. She declined to provide a specific reduction
target. Although Delphi has idled 48,517 workers at dozens of
plants due to the strikes, Healy said deliveries to the company's
non-GM customers have not been affected.
"Our intent is to not interrupt the supply at all," she said.
Mike Meyerand, a spokesman for GM's International Operations,
said that unit has not been singled out for cost cuts due to the
North American strikes.
GM said Tuesday the number of non-striking workers sent home rose
to 142,600 from 122,400 on Monday. Twenty-six of GM's 29 North
American light vehicle assembly plants were affected -- equaling
the total plants brought down in the March 1996 walkout.
Added Tuesday was a partial shutdown of the Bowling Green, Ky.,
plant that makes Corvettes, and the Detroit P-Chassis truck
operation, which was completely idled. Assembly factories still
operating include the Oshawa, Ontario, truck plant; Saturn Corp.
in Spring Hill, Tenn.; Ramos Arizpe, Mexico, small car plant, and
the medium-duty truck line at Janesville, Wis.
At the UAW constitutional convention in Las Vegas, Canadian Auto
Workers union President Buzz Hargrove said his members at the
Oshawa truck plant will refuse to use parts made on truck
stamping dies GM moved from the Flint Metal plant in anticipation
of the strike.
GM removed the dies, used to make hoods, fenders and other
stamped parts, out of the Flint site to a plant in Ohio to
protect the launch of its new full-size pickup trucks at the
Oshawa facility.
Hargrove said the Oshawa plant is using parts made at the Flint
Metal Center before the dies were moved, and making about 70
trucks a day. If the strike stretches into late July or August,
as many officials predict, GM may try to bring in new parts made
after the dies were moved.
"We've notified General Motors, 'Don't expect that you're going
to run our plants by using scab parts from any plant,"' Hargrove
said. |
