GM’s Midsized Utes: Future Drawing Near?
February 07, 2008

By Joe Szczesny

In a piece of business left over from last year’s labor negotiations, General Motors and the International Union of Electrical Workers are making a bid this week to wrap a new contract.

Jim Clark, IUE president confirmed the two sides were scheduled to talk after a hiatus for the holidays. Traditionally the IUE-GM contract is very similar to the agreement between GM and the United Auto Workers.

One key remaining issue in the IUE talks, however, is the fate of the GM assembly plant in Moraine, Ohio, where GM now builds midsize sport-utility vehicles including the fading Chevrolet TrailBlazer, GMC Envoy and Saab 9-7X.

Tom Wilkinson, GM spokesman, said the plant is scheduled to continue building the midsize SUVs for the “foreseeable future.”

However, the recent announcement by Isuzu that it was pulling out of the U.S. market because GM would no longer supply the Moraine-built Ascender underscored that the days of the traditional midsize SUV could be numbered.

The IUE is undoubtedly pressing GM for the kind of guarantees about future product allocation the automaker granted the UAW in return for concessions on health care and wages for new employees.

However, GM also has excess capacity, and although the IUE’s Clark declined to comment on the negotiations, he did observe via e-mail that sales of Saab 9-7X also have dropped by half in recent months.

Troy Clarke, president of GM North America, declined to comment on whether GM was prepared to offer any kind of guarantees of a future product for the Moraine assembly plant, which has roughly 2,000 employees.

GM did announce this week it planned to spend $69 million at the Moraine engine plant, which will now manufacture a new Duramax 6.6-liter V8 turbo-diesel engine to meet 2010 emissions standards. The renovations to the engine plant are expected to begin immediately and will protect 1,000 jobs. GM officials said they also will provide the union with some, but not all, of the job-security guarantees the IUE is seeking.

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