Bumps In Gm's New Labor Road

GM's new-factory plans may cool its cozier labor relations

After years of open warfare with union workers, General Motors Corp. has pulled a U-turn. GM execs now freely admit that Ford Motor Co., which has been more civil to the United Auto Workers (UAW)--and has avoided strikes--has a better idea. "They have a relationship that has allowed them to be competitive, without the work stoppages we've had," concedes GM North America President Ronald L. Zarrella.

Now, GM's new policy faces its first test. The issue: "Project Yellowstone," GM's proposal to replace small-car factories in Lansing, Mich., and Lordstown, Ohio. GM is already demolishing small buildings in Lansing, in preparation for a new plant that will assemble cars from modules made by subcontractors. Problem is, the UAW isn't ready to sign on until it knows how workers will fare. In mid-February, UAW President Stephen P. Yokich cut off informal talks on the local level and brought the discussions to his national board.

Yellowstone is a top priority for GM, which now loses money on small cars. The carmaker hopes to break ground within months, if the union gives its O.K. relatively soon. GM has hinted that it will help the union organize the module suppliers and might even get them to hire any displaced GM workers. But union insiders say Yokich wants larger issues involving organizing and outsourcing of jobs to be hashed out at the national level. Only then will locals and GM negotiate on Yellowstone. "We're still talking to the UAW leadership," says GM spokesman Vince Muniga. "It's being handled at the highest levels."

If the issue isn't resolved soon, the new plants could be delayed until after national contract talks, slated for June. But GM can't press too hard, lest it poison the national negotiations--a quick route back to its old labor problems.

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