It's hardly unexpected given recent gloomy sales numbers, but General Motors announced today that they will be cutting shifts at several North American plants. Unfortunately, nearly 2,000 workers will lose their jobs in the process as GM eliminates its third shift to slow production and ease the backlog of vehicles sitting on dealer lots. The affected plants are Orion, Michigan; Oshawa, Ontario; and Lordstown, Ohio (these plants manufacture the Chevrolet Malibu, Pontiac G6, Chevrolet Impala, Chevrolet Cobalt, and Pontiac G5). The news comes on top of the previously announced idling of the Fairfax assembly plant in Kansas City mid-January. That plant makes the Saturn Aura and also the Chevrolet Malibu.
Local UAW contract negotiations aren't going well for General Motors, and today they took a turn for the worst as union members at the automaker's Fairfax assembly plant in Kansas walked off the job at 10AM EST. The bulk of GM's hot-selling Chevy Malibu are produced at the Fairfax plant, with a lesser number of the four-door sedan being built at the automaker's Orion plant in suburban Detroit. Last month GM sold 17,050 Malibus, a 39.5% increase in volume over April 2007. The local union in Fairfax had given GM a number of ultimatums, extending them since the first was established for April 22nd. We're not exactly sure what issue is at the heart of these contract negotiations, but The Detroit News reports that at least one bone of contention is the plant requesting seniority to snag transfer jobs, while the other issues remain undisclosed.
General Motors has been able to weather a 10-week strike by union members against American Axle, one of its main suppliers, as only production of large trucks and SUVs have been affected. Another strike at its Lansing Delta Township plant where the large Lambda CUVs are built has also only served to reduce inventories of vehicles that are seeing a slow down in sales. While the General can withstand a reduction of inventory for vehicles that currently aren't selling as well as they were before because of high gas prices and a slump in the housing market, the Malibu is gaining popularity with consumers month over month. The Fairfax and Orion plants were already producing at capacity to keep up with demand, so today's strike will assuredly hurt the automaker where it matters most: the bottom line. We'd expect GM to act quickly to end the strike, as money is being lost by the hour while Malibus aren't being built.
GM is still dancing with the UAW over contract issues, now its doing it with local plants regarding items that weren't in the national agreement. However, The General has managed to wring two more days to negotiate before workers at its Fairfax assembly plant in Kansas City, KS, walk out. The 2,600 workers of UAW Local 31 churn out 3,100 Malibus every week.
Local contracts -- as opposed to the national agreement -- concern work-rule, seniority and other non-economic issues. The UAW Local says that GM isn't following the blueprint of the national agreement and is pushing for too much. GM says it is negotiating in good faith.
And Fairfax isn't the only plant affected. Strikes and idling due to rejected contracts have taken place at GM plants in Parma, Ohio, Lansing, Michigan, and Detroit-Hamtramck. Those interruptions have halted production of the Buick Lucerne and Enclave, Cadillac CTS, Saturn Outlook, and GMC Acadia. The Hamtramck plant is calling workers back, which will get the Lucerne and CTS in production again, but now the Malibu is on the block. GM has a 37-day supply of the hot commodity, and it also has another plant that builds Malibus. If GM and UAW Local 31 can't come to an agreement, Malibu production at the Fairfax plant will cease tomorrow.
