DETROIT - Strikes dragged on at two General Motors assembly plants last week, but the automaker declared it will stand tall in its drive to cut costs.
'We need to continue to improve our competitiveness,' Rick Wagoner, GM's president of North American operations, told Automotive News.
'If somebody else is building a competitive product at 20 hours and we're doing it at 30, then we owe it to our people to explain why we aren't being efficient.'
The strikes at a car plant in Oklahoma City and a full-sized pickup plant in Pontiac, Mich., have cost the company $225 million so far and 54,000 units in lost production, according to GM spokesman Mark Tanner.
Separately, Chrysler Corp. reported that a 29-day strike at an engine plant in Warren, Mich., cost that automaker $750 million in pretax dollars.
Meanwhile, no end is in sight to the strike at Oklahoma City, where GM assembles two new mid-sized cars, the Chevrolet Malibu and the Oldsmobile Cutlass.
Wagoner said UAW Local 1999 at Oklahoma City agreed to staff reductions when the plant was awarded the products. The union said GM is being stingy and greedy.
The strike jeopardizes GM's effort to boost its share of the competitive mid-sized car segment.
'We're all disappointed,' Wagoner said. 'In the case of Malibu, we're going to lose volume and it's an unfortunate time because the product is coming out hot.'
Wagoner and the union said the strike is over more than staffing levels.
Oklahoma City employees want more work done in the plant rather than being farmed out to subcontractors.
'There are other outsourcing issues,' said Yvonne Smith, vice president of Local 1999. 'We've presented business cases that we can do the work cheaper in the plant, but they want to send this stuff to outside suppliers.'
GM reduced its Oklahoma City work force because the Cutlass and Malibu have fewer parts than the previous models built at the plant. The new models were also designed for easier assembly.
'I think there's been a significant design improvement in the way that vehicles can be assembled,' Wagoner said. 'I can't say that all their claims are wrong, but I think we should be able to run the plant pretty close to (current) manning levels.'
17.5 HOURS PER UNIT
Smith said the Oklahoma City plant has 3,582 workers, down from 4,700 when the plant was awarded the new products four years ago.
The union agreed to cut jobs via attrition over four years, which would total about 450 people, she said. Smith dismissed published reports that the union agreed to 900 job cuts.
She said GM wants the plant to build the cars at 17.5 work hours per unit, which she said is impossible. She said employees now work 58 or 59 minutes per hour, compared to prior standards that ranged from 51 minutes to 56 minutes per hour.
'That is virtually no recovery time,' Smith said.
Wagoner said there are no plans to move some Cutlass production to Wilmington, Del., a second plant for Malibu. And although the strike continues, Wagoner said it is doubtful GM would ever use replacement workers.
'These things have a way of working out,' he said. 'I suspect this will work out.'