UAW Strikes GM, Dana Gets Ex-Toyota Exec
April 18, 2008

By Bill Visnic

The massive gears of the auto industry’s manufacturing sector continued to grind out a changing tune this week, reacting to larger, macroeconomic forces in the U.S. economy that are mandating interesting, if not wrenching, change, particularly for the domestic Big Three automakers.

On Thursday, union leaders for United Auto Workers Local 602, representing workers at General Motors Corp.’s Delta Township assembly plant near Lansing, MI, called a strike because the local has yet to sign a plant-level contract with GM, despite what it claims have been months of negotiation. The plant assembles GM’s new generation of crossover utility vehicles, the GMC Acadia, Saturn Outlook and Buick Enclave. The Enclave and Acadia have been selling briskly.

Local Unrest Telegraphs Larger Intentions?

In addition to the local-contract issues, it is believed the Delta Township strike is part of a larger labor-solidarity effort to strong-arm GM into settling its ongoing labor dispute with key supplier American Axle & Manufacturing Holdings, Inc. GM has been seemingly nonplussed about the impact of the American Axle strike, perhaps because American Axle chiefly supplies components for GM’s large pickups and SUVs, whose sales have been markedly slowing.

Although there have been signals of resolution in the contentious strike, it nonetheless is approaching a two-month duration. Moreover, other UAW locals, including that representing a crucial GM transmission plant, also were threatening strikes to force local contracts.

Once-Troubled Supplier Grabs Toyota Manufacturing Heavy-Hitter

Meanwhile, giant supplier Dana Corp. in Toledo, OH, announced it has hired Gary Convis, a longtime manufacturing expert for Toyota Motor Corp. in the U.S., as its new chief executive officer. Dana, which suppliers almost all auto manufacturers in the U.S. and also is a major supplier for the heavy-duty truck industry, emerged from bankruptcy in February and has been seeded with billions in investment to fund a wholesale restructuring.

Convis, 65, who in his long career at Toyota instituted many of the lean-manufacturing principles for which the company became famous, retired last year but had agreed to stay with Toyota for two years as an advisor. Convis’ presence at Dana is likely to instill the sort of new-age – i.e. Toyota-emulating – philosophy to the supplier-automaker relationship that it appears large suppliers and the automakers both desperately need to adopt – and quickly.

Nissan-Chrysler Nibble on Manufacturing Issues

Also promising sea change was this week’s announcement from Nissan Motor Co. Ltd. and Chrysler LLC that the two will initiate a product-sharing venture that sees Nissan supplying Japan-sourced compact cars for Chrysler and in return enjoying supply of fullsize pickup trucks produced by Chrysler in Mexico. 

The agreement is widely viewed as a prelude to a larger Nissan-Chrysler linkup – but in the near term, appears to address thorny manufacturing-related issues for both companies. First, it seemingly gives Nissan a face-saving “exit” from the contracting fullsize truck segment, where its current Titan has not established a meaningful foothold. The move presumably will allow the Canton, MS, plant that produces the Titan to shift capacity to more profitable models.

The plan also means Chrysler can take on new capacity to take up the increasing slack in its manufacturing empire, which currently is much too dedicated to the pickups and SUVs to which consumers are turning their backs in the face of crushing fuel prices.

The Nissan-Chrysler truck arrangement does not begin until 2011, however. By that time, the U.S. auto-manufacturing landscape may be even vastly more evolved.

Photos:

1. GMC Acadia, one of trio of GM crossover vehicles affected by this week's new UAW strike in Lansing, MI.

2. New deal with Chrysler seemingly spells the end of a Titan pickup manufactured by Nissan Motor Co. Ltd.

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