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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: porcupine --''''> who wrote (433)	6/25/1998 9:03:00 PM
From: porcupine --''''>	Respond to of 1722

GM Memo: Total Lockout Being Considered GM to escalate plant idling to conserve cash By Todd Nissen DETROIT, June 25 (Reuters) - General Motors Corp., desperate to save cash in the face of crippling labor strikes, is moving to shut down the rest of its North American manufacturing facilities, but will continue to protect key product launches such as its new full-size pickup truck. Internal communications from senior executives said the ''cold shutdown'' comes as there has been ''no constructive feedback'' from the United Auto Workers union in several days toward resolving two parts plant strikes in Flint, Mich. A memo distributed on Wednesday by top manufacturing executives said non-essential hourly workers should be reduced, and all UAW-represented employees should be classified as as ''not in active service.'' The strikes have idled 155,600 North American workers, including the 9,200 striking employees. GM has also been forced to suspend operations at 26 of 29 North American assembly plants, as well as more than 100 parts operations. The memo signals that more of remaining hourly employees who continue to work at component facilities and other areas could be sent home. GM has a total of 224,000 hourly employees in the United States. ''The goal is to effectively cancel activities other than the GMT800 and other near-term launches,'' according to the memo from GM's Manufacturing Managers Council. The ''GMT800'' refers to the code name for the new Chevrolet Silverado and GMC Sierra full-size pickup trucks. Donald Hackworth, who heads GM's North American car operations, emphasized the severity of what he described as a ''cold shutdown'' in an internal voice-mail message. ''This action is unparalleled and reflects the critical impact that this strike is having on this company,'' he said in the message recorded Wednesday. Hackworth also repeated earlier warnings that spending on future car and truck programs could be curtailed because of the walkouts. ''If this strike persists, they too could be in jeopardy,'' he said. The strikes, which began June 5 and June 11, are estimated to be costing GM $75 million a day in lost profits. Second-quarter earnings could be slashed by as much as $1 billion, according to Wall Street estimates. The manufacturing directive marks the second time this week that GM senior executives have issued cost-cutting mandates. On Tuesday, North American Operations President G. Richard Wagoner ordered a 50 percent reduction in discretionary spending. The memo on Wednesday said managers should limit overtime for remaining hourly and salaried workers; move the bulk of workers to the day shift to save electricity; launch an aggressive utility cost conservation program; and minimize the use of contract services. ''We need to view this as a maximum effort to contain cost in the very near term,'' the memo said. UAW Vice President Richard Shoemaker said union attorneys were reviewing GM's action to determine if it constitutes a lockout. ''They can call it what they want, but they're not making any profits and they can better use this time to try to do something constructive and settle this thing and stop fooling around with all kinds of theatrics,'' he said at the union's constitutional convention in Las Vegas. Shoemaker added that the union has responded to the grievance GM lodged against the UAW on Wednesday, claiming the strikes are illegal. He declined to provide specifics. In its Thursday morning update, GM said no additional facilities have been idled. It continues to operate the Oshawa, Ontario, truck plant, the Saturn Corp. car plant in Spring Hill, Tenn., and the Ramos Arizpe, Mexico, small car plant. The longest strike is at the Flint Metal Center, which stamps hoods, fenders and other parts, and employs 3,400 members of UAW Local 659. Disputes center around union claims of health and safety violations, work rules and new investment issues. At the Delphi East facility, 5,800 UAW Local 651 workers are off the job. In addition to health and safety issues, the union says GM wants to shift work to outside suppliers that would cost 2,500 jobs. The plant makes instrument panels, spark plugs and other parts. Negotiations were scheduled to resume at the two plants Thursday.