UAW Strikes GM Where It Hurts Most -- in the ‘Bu
May 06, 2008

By Michelle Krebs

The United Auto Workers union struck -- literally -- General Motors where it hurts most -- at the automaker’s Kansas City, Kansas, factory that builds the fast-selling Chevrolet Malibu, already in tight supply.

The 2,600 UAW workers in Kansas walked off the job Monday morning after a strike deadline passed with no local contract. The supposed hangup is over seniority issues and work rules. However, many experts believe the strike -– and ones threatened at other GM plants –- has less to do with local GM issues than it does to show support of its union brothers at American Axle, on strike against the GM supplier for more than 70 days.

Whatever the case, a strike cutting Malibu production is damaging to GM, especially if it lingers.

The Malibu is a bright spot in the otherwise dismal auto industry. In January, the Malibu won the North American Car of the Year award. GM has been hitting its sales targets with the Malibu, boosting retail sales and limiting less profitable rental car sales that abounded in the previous version. First quarter retail sales were up more than 110 percent from a year ago; market share is 1.3 percent higher.

The new Malibu also is making more money than its predecessor, with transaction prices $4,000 higher than on the old one. And the Malibu is showing signs of making inroads against import stalwarts Toyota Camry and Honda Accord.

Meantime, inventories are low, about half the norm. GM has been figuring out ways to boost production, adding Malibu at the Michigan plant only in January.

Now, it is only the Orion, Michigan, factory building the Malibu. There, the Malibu shares the assembly line with the also-popular Pontiac G6, causing GM headaches in terms of shuffling production. The Kansas City plant, meanwhile, also builds the Saturn Aura.

Meantime, the Detroit media keeps reporting that a deal between American Axle and its striking union workers is imminent. But the strike wears on as one of the longest in memory. It has stopped or slowed production at about 30 of GM’s North American factories since Februrary 26. GM had been trying desperately to keep it from hitting plants turning out its best-selling models like the Malibu and its crossover Buick Enclave and GMC Acadia. Nevertheless, the Delta Township, Michigan, factory that makes the crossovers has been on strike since April 17.

At the same time, GM has been negotiating with UAW locals across the country for local contracts. Only about a dozen of the 77 have been ratified; a few are threatening strikes. About the only good news is that the Orion, Michigan, plant is among those with a signed contract ensuring some Malibu production will continue.

Posted by at 6:56 AM under Business , GM | Comments (1) | digg this | Seed Newsvine