BY HOLLY HARKNESS

DETROIT - United Autoworkers Union (UAW) negotiators reached agreement on a three-year contract with General Motors Corporation on November 2. The contract mirrors the agreements already reached at Ford and Chrysler. However, the contract contains several provisions that give GM greater flexibility to reduce its workforce.

General Motors stock rose $1.625 to $55.625 when Wall Street investors received word that the contract allows GM to cut between 30,000 and 35,000 jobs over the life of the three-year deal.

"It may seem as if the UAW is imposing the same deal on GM that it negotiated recently with Ford and Chrysler, but in reality things are being carefully fudged to make the contract fit with GM's needs," Fortune magazine observed.

Despite record profits of $6.9 billion last year, GM's car and truck business has steadily lost its competitive advantage over not only Ford and Chrysler, but Japanese and German automakers.

GM's labor costs remain considerably higher than those of its competitors, because GM makes more of its own parts in-house at full Big Three [GM, Ford, and Chrysler] wages, and because GM hasn't driven down the labor time needed to produce each vehicle as much as its rivals.

"GM's labor costs per vehicle amount to 17.5% of revenue per vehicle . . .. That compares with 10.2% for Chrysler Corp. and 5% for Ford Motor Co.," stated an article in the November 11 Wall Street Journal.

Saying they would stem the loss of jobs from Big Three operations, UAW officials negotiated agreements this year to "guarantee 95 percent of current employment" over the life of the contracts. But these agreements contain provisions for automakers to exempt "troubled" or "noncompetitive" plants from the guarantee. Also excluded from the equation are jobs lost to "efficiency gains."

The UAW officials signed several documents that state for the record that GM is different than Ford and Chrysler. The pact with GM allows them to adjust the workforce in larger geographic groupings than at Ford or Chrysler. For example, GM's 13 factories in Flint, Michigan, which employ 28,000 workers, constitute a single grouping. So GM could sell off an entire plant of 1,400 workers without violating the 95% limit.

Another element of GM's cost cutting plan comes into play as current employees retire. About half of GM's 213,000 U. S. hourly workers will be retiring in the next 10 years, and the new contract raises incentives for workers to take early retirement. Even though the UAW agreement forces GM to replace most of these workers, the company can do it at a greater cost reduction.

The deal allows the company to pay lower wages at any new parts operations it buys or starts up. At other GM plants, new hires earn only 70 percent of the base pay and take three years to catch up. GM does not have to provide medical benefits to these workers for the first seven months. Under the new contract these workers will be forced to use an HMO for their medical benefits for the first two years.

GM officials said that they expect the agreement to allow them to get about halfway to their goal of matching the productivity of the leading Japanese automakers. This means shedding 35,000 hourly jobs of the 70,000 GM needs to cut.

The national agreement, which includes a $2,000 lump sum the first year and 3 percent wage increases the next two years, is likely to pass in ratification votes that will be carried out through November 15. But if the past two years are any indication, the company faces stiff resistance from its workers when it comes to local agreements.

In addition to the national contract, each UAW local must work out a local agreement with the plant it organizes. These agreements cover everything from job classifications to safety rules to staffing levels at that specific location.

In October two UAW locals at GM plants in Indianapolis and Janesville, Wisconsin, went on strike over disagreements in the local negotiations. This included demands for more jobs to relieve the burden of overtime, unresolved grievances, and seniority rights. Over the past three years there have been numerous walkouts at local plants, the longest being the 17-day strike at GM's Delphi plants in Dayton, Ohio.

The strike in Indianapolis ended after five days and the Janesville strike was settled November 6. These strikes and the three-week walkout against GM in Canada cost the company a loss of about 135,000 cars and trucks. The Janesville plant shut down production of GM's most popular sport utility models, the Tahoe and Suburban. But GM showed it was willing to take the loss in its push and shove with the union.

Only 10 of 123 UAW local agreements had been settled at General Motors plants as of November 3.

Holly Harkness is a member of Local 235 at the American Axle Manufacturing plant (formerly GM's Chevy Gear and Axle).  
 
 
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