GM Implements New Plant Work Rules
|Topics: General Motors
February 27, 2007
General Motors Corp. is pushing union locals across Detroit to accept new plant work rules that are aimed at cutting production expenses and preventing the potential loss of future vehicle production work. GM calls this new plan of theirs the standard “True North” practices.
In view of the said standard, GM leaders have been visiting plants to push for changes that range from getting workers to take on more jobs to outsourcing work not directly related to building vehicles. The goal of the company is to make its plants fully competitive and functional to best compete with its Japanese rivals in the territory.
"The corporation is telling the international and local unions that if changes are not made, they will be unable to compete with our competitors," the United Auto Workers leaders in Lordstown, Ohio, wrote in a recent newsletter to its members. The strategy is not new especially to struggling companies like GM.
According to Sean McAlinden, the chief economist for the Center for Automotive Research in Ann Arbor, GM loses $1,300 on average for each vehicle it makes in North America, while the Toyota Motor Corp. makes about $2,100 on each car and truck built here. However, changing plant work rules is a very delicate matter. Workers could be forced to do more than what they are used to. There are some who could be tapped to do multiple tasks. Those who do not usually integrate EBC brake rotors to GM vehicles could just add it to his job description.
In addition, the union is being pushed to surrender work not related to building cars and trucks. These activities include grounds keeping and custodial work. "We're going to sit down and negotiate responsibly," said George McGregor, the president of the UAW Local 22, which represents workers at GM's Hamtramck assembly plant. He also adds, "It's negotiable if both sides can get something out of it. Especially if it comes down to getting a job or not getting a job."
GM did not give many details about its new plant work rules. Basically, the rules were compilations of benchmarks applied by other automakers. Some of the rules though are set by GM executives. These rules are deemed the best remedy to make the recuperation process effective.
"We benchmark every part of the business, and each plant is at a different stage of the journey," GM spokesman Dan Flores said. "With the urgency of where we're at in our turnaround, clearly we have to look for ways to close the competitive gaps and to do it as quickly as possible."
Different GM plants have different status. Two GM Lansing-area factories are among those that have the most flexible rules. The factories were opened within the past six years. There, GM implemented brand new rules for a fresh start. At Lansing's Grand River Assembly plant, workers team up on the line and everybody knows how to do everybody else's job. They all cooperate to streamline the process and make everything easier for everybody.
"The fact is, you can't build cars like you did 30 years ago," said Fred Charles, a union official for the plant's Local 652. "It's a constant struggle. They have their ideas on how the business should be run. We want to protect the high-paying jobs in America."
According to analysts, the most affected is the Lordstown plant which manufactures the Pontiac G5 and the Chevrolet Cobalt. Analysts added that Lordstown could be in line to build that vehicle eventually, if it can get the job done the way GM wants.
Jim Graham, the president of UAW Local 1112, which represents Lordstown workers, declined to go into details about the specific terms they have discussed with GM. However, he acknowledged that the plant's future is at stake. "The key is to get a new car for Lordstown," Graham said. "It's not going to be an easy contract. The membership understands that. They also understand the importance of getting a new product."
McAlinden said changes at the plant level can help. “About 23 percent of GM workers fall into the highly paid skilled trade’s category. Getting that figure down to 10 percent would save GM up to $180 on each car it builds.”
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