Rumble In Buick CityKathleen Kerwin
Linda Cromwell is bone-tired. The 40-year-old welder at General Motors Corp.'s giant Buick City complex in Flint, Mich., has been working six days a week and up to 12 hours a day, trying to keep up with demands for transmission parts. "I work from 6 to 6, rush dinner, and then try to help my sons with their homework," sighs the mother of three. "It's a lot of stress."
GM has loads of weary workers these days. Surging demand for its cars and trucks has collided with the company's steady downsizing to improve its productivity. The inevitable result: more work with far fewer workers to do it. On Sept. 27 the situation reached the breaking point, as far as workers are concerned. Cromwell and 11,500 of her fellow United Auto Workers at the Buick City complex walked off the job, declaring: no more. Workers at two other GM transmission plants are threatening similar walkouts.
If it lasts, the Buick City strike will quickly paralyze GM. Already, it has halted car assembly there and idled 5,550 workers at two plants in Lansing, Mich. But more important, it stopped Buick City's production of engines and components for transmissions and suspensions, which could cripple GM in days. One key part, a torque converter, goes into 85% of GM's automatic transmissions. Without it, 28 of GM's 29 North American assembly plants could shut down within a week, analysts say.
TEMP TABOO. Given such numbers, many observers think GM may have to back down soon. A short walkout likely wouldn't prevent its North American operations from ending the year in the black. But net losses could reach about $150 million a day during a shutdown, analysts estimate, and that would add up fast. The timing also couldn't be worse for GM. It was just rebuilding inventories after brisk sales and lengthy production changeovers for new models cut into supplies. Such key new models as the Chevrolet Lumina and the Oldsmobile Aurora are already in short supply.
Beyond such immediate problems, the Buick City dispute highlights GM's labor quandary. The company could hire workers to meet the breakneck pace of orders and ease worker burnout. But when efficiency measures kick in a few years from now, GM probably won't need the new personnel--particularly when the next industry slump hits. And the union objects to hiring temps to fill in.
The result is a standoff. GM hasn't hired hourly workers since 1986, and senior managers, egged on by Wall Street, are adamant about not doing so now. "We have no intention of going back to the way things used to be," G. Richard Wagoner Jr., GM's president of North American auto operations, said in a recent speech. "That was a going-out-of-business strategy." GM still has 4,200 laid-off workers on its payroll. However, even relocation incentives of up to $60,000 haven't lured them into moving to plants that need help.
The union argues that workers are being pushed beyond all reasonable limits. "GM is now breaking the contract by trying to build too much product with too few people," says Stephen Yokich, head of the UAW's GM Dept. "That's wrong and it's dumb. Efficiency and overwork are not the same thing."
Working heavy overtime has many rank-and-filers riled up. "I ache every night when I go home," says assembly worker Elbert Rush. Buick City workers say they have to run to keep up with cars on the line. "We've surpassed every standard management has set, and it's not enough for them," says Katrina Bauer, an electrician at the complex.
Short tempers also may be taking a toll. At a GM engine plant in Livonia, Mich., an unknown saboteur--nicknamed "Edward Scissorhands" by factory workers--cut power to the plant, briefly stopping production on Sept. 19. And Buick City has had two arson fires in recent weeks, although it's not clear that overtime protests were the motive.
Hiring temporary workers would ease the pressure. GM employed some 7,000 temps during summer vacation season, but many were let go after Labor Day. The union wants permanent hires to replace them and to offset retirements, which average 70 a month at Buick City alone. Now, while GM is making money, is the time to insist, the union figures. Says David Yettaw, president of the Buick City local: "They should make profits, but not like weasels romping in a field of gold."
KEEP ON TRIMMIN'. Other carmakers are also caught in a crunch. For instance, workers at Ford Motor Co.'s Indianapolis steering-gear plant have declined some overtime, forcing Ford to cut production. But neither Ford nor Chrysler Corp. is boxed in the way GM is. They both shrank years ago and can now afford to add new workers--albeit sparingly--to boost production of hot products. For them, retirements will pare any excess from blue-collar rolls by the time the next recession hits, analysts say. Chrysler, for example, is adding a third crew at its Jefferson North plant in Detroit to build more Jeep Grand Cherokees, which are in short supply. The average age of workers on the first two shifts: over 50.
GM's top brass has vowed to keep trimming its workforce to match rivals' productivity by 1996. It takes Buick City 4 workers to build a car, compared with 2.5 for Ford to build a Taurus, according to James Harbour, a manufacturing consultant in Troy, Mich. To reach such levels, GM needs only about 200,000 workers, analysts say--some 47,000 fewer than today. With nearly 15,000 workers retiring annually, GM will be closing in on that goal within a few years.
The company has been improving assembly-line efficiency, often with the UAW's help. But the big gains come when factories change over to new, easier-to-build models. For instance, GM builds the new Chevrolet Blazer with 40% fewer parts and in just two-thirds the time the previous model required.
Which side will blink first? To restore labor peace and ease the crunch, GM may have to agree to hire several thousand new workers. And to avoid hiring even more, it may also have to ease its production pace and forgo some sales while demand is the strongest. Neither solution is likely to please shareholders. But given the surly mood the long hours have engendered in its labor force, trying to stare down the UAW might prove costlier.