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

To: Freedom Fighter who wrote (1558)	4/13/1999 9:54:00 PM
From: porcupine --''''>	Read Replies (1) \| Respond to of 1722

GM still hopes to build new assembly plants- exec By Ben Klayman NEW YORK, March 29 (Reuters) - General Motors Corp. President Rick Wagoner said on Monday he remains hopeful, despite union opposition, that the world's largest automaker can build new U.S. assembly plants to make the company's small-car business profitable. "It may not come as quick and it may not come across the board, but I'm pretty comfortable we can get some ideas together to work on," Wagoner told reporters at a GM media event at New York's Grand Central Station where the firm introduced its 2000-model year Chevrolet Suburban and GMC Yukon full-size sport utility vehicles (SUV). GM had hoped to break ground in April on three smaller plants that would use modular assembly, in which nearby suppliers build chunks of the car that are then delivered for easy and fast assembly. The idea of the new plants, dubbed the "Yellowstone" project, is to cut factory costs by 20 percent and make GM's small-car operations profitable. GM has said it loses $1,000 including incentives on each small car it sells. But talks, which have focused on replacing older small-car assembly plants in Lansing, Michigan, and Lordstown, Ohio, have slowed. On Sunday in Detroit, UAW President Stephen Yokich blasted the GM program as bad for union workers because it would send work now done by UAW members to outside suppliers. "There's nothing new about modular assembly. It's just another word, as far as I'm concerned. It's outsourcing," he said. Wagoner said the April groundbreaking is now unlikely, but timing is not critical because demand for small cars is not growing as fast as for pickup trucks, SUVs and minivans. He said the Yellowstone program was not dead, and he defended concepts like more efficient plant layouts and using supplier-built modular parts. Wagoner said those methods are employed successfully around the world by GM and its competitors. "For any new plant that we were to build, they'd be things we would consider here as well," said Wagoner, who hopes to work out any issues with the union during pre-bargaining discussions leading up to the expiration of the three-year national contract on Sept. 14. The UAW, which represents about 396,000 hourly workers in the United States at GM, Ford Motor Co. and DaimlerChrysler AG will begin formal contract talks in late summer. Wagoner described talks with the UAW as "constructive" and the attitude of senior union officials as "engaging." But Yokich described relations with GM, which the UAW hit with two costly strikes last summer, as still strained. Wagoner also said GM will probably need to expand its capacity to build V8 engines if the truck market continues to grow as the automaker expects. No such plans are in the works now and capacity is meeting current demand. Wagoner would not rule out light trucks eventually making up 60 percent to 65 percent of the U.S. auto market, up from about half now. He predicted 1999 will be the first year light trucks out sell passenger cars.