Friday, August 7, 1998

GM's plans show ability to adjust

General Motors is the nation's high-cost producer of automobiles, the company's profits are minimal, and it can't go on that way. That's why GM has announced plans to reduce its work force, sell off a cumbersome subsidiary, smooth out a number of bureaucratic wrinkles and build a series of modernized plants.

The United Auto Workers is not a happy camper, although, as a press account notes, the union likes that GM is planning to construct the new operations on American instead of foreign soil. The UAW, whose illegal and costly strike against the beleaguered corporation just recently ended, should rejoice, too, that GM aspires to achieve its employee cuts through retirements, not layoffs. What the union most assuredly doesn't like, it's noted, is that the new generation of plants will require less manpower than the old ones and will rely on mostly non-unionized companies for many auto parts.

The economic reality the UAW and a number of other unions need to digest is that, if American companies are not lean, mean and competitive, especially in today's global business environment, they will ultimately be done in or be forced to move all operations to other countries. It's traditional and well within reason for workers in unions to seek wages and work conditions in accord with relatively high U.S. standards. But when they resist increased efficiency and higher productivity in the name of keeping things as once they were, they are fighting their best interests.

GM, the nation's largest corporation, has come under criticism for an alleged failure to adjust sufficiently to the demands of the hour. In announcing the new plans, the company's CEO acknowledged past complacency and said those days were over. The plans do indeed appear to constitute an answer to the critics, and not a bad one.