Friday, June 26, 1998

GM prepares to complete North American production shutdown

By BRIAN S. AKRE / AP Auto Writer

LAS VEGAS (AP) -- Apparently settling in for a long strike, General Motors Corp. is telling its factory managers to lay off nonessential workers, suspend plant maintenance and cut back on electricity.

A parts shortage caused by strikes at two Flint, Mich., plants has already idled most of GM's assembly plants in North America.

But now the world's No. 1 automaker is going further, halting plant maintenance and repair work during its annual summer shutdown and beyond.

In a recorded message to GM employees, Vice President Donald C. Hackworth called it a "cold shutdown."

GM said in a memo Wednesday that the actions are necessary to help limit a "serious cash drain" on the company.

"This action is unparalleled and reflects the critical impact that this strike is having on this company," he said. "To protect our company during this crisis, we must reduce all expenditures that don't impact our future product programs."

The only GM assembly plant in the United States still producing vehicles Thursday was the Saturn car factory in Spring Hill, Tenn.

The major exception to the directive is the Oshawa, Ontario, truck plant where the launch of the next-generation of GM's full-size pickups has been under way since early this month. It will close for the summer shutdown set to begin Monday but reopen when the shutdown ends in two weeks.

A smooth launch of the '99 pickup is critical for GM. The current model is the company's top-selling vehicle and one of its most profitable.

The strikes by about 9,200 workers have forced the layoff of nearly 146,500 other GM workers from 26 major assembly plants and about 100 parts factories across North America. Analysts expect the lost production to reduce second-quarter profit by more than $1 billion.

The strike was called over a long list of health and safety issues, unresolved grievances and subcontracting disputes.

GM spokesman Gerry Holmes said he did not know how many more workers would be laid off as a result of the cold shutdown. The automaker has about 235,000 hourly and salaried workers in North America, not including its big Delphi parts subsidiary.

UAW President Stephen Yokich, at the union's convention in Las Vegas, said GM's latest actions were a public relations gimmick.

"Since we went out on strike, they've done nothing but spin PR instead of going to the bargaining table," he said.