By Norm Dixon
The giant US car maker General Motors has been forced virtually to cease production after workers at GM's parts plants in Ohio began strike action to protect jobs from "outsourcing". Twenty-four out of GM's 29 assembly plants in North America are idle.
The strike began on March 5 at two plants in Dayton, Ohio, which makes brake parts for almost every car and truck GM manufactures in North America. United Auto Workers Local 696's 3000 members walked out after GM awarded a contract to another company to produce anti-lock braking systems for its Camaro and Firebird sports cars.
GM has gradually whittled down its work force while subcontracting work to mainly non-union companies, a practice it wants to intensify. The union insists that GM employ 125 more people to produce the brakes in GM plants. The union is also demanding greater safety and better training.
GM announced on March 14 that it would attempt to have government unemployment benefits in 31 states denied to the almost 112,000 UAW members employed by GM. A further 13,000 workers in smaller components plants and factories in Canada and Mexico are also idle. The workers have been sent home without pay. UAW vice president Richard Shoemaker urged laid-off workers to continue to file for unemployment benefits.
Wall Street is backing GM's hard line against the UAW. Big business spokespeople quoted in a Reuters dispatch said they were glad the car maker was standing up to the United Auto Workers union on outsourcing.
"I don't care about the effect this has on first-quarter [economic growth] numbers", said an analyst for the Lehman Brothers stockbroking firm, Joseph Phillippi. "What's more important is that these guys run the business in the most efficient manner."
Phillippi estimated that a complete GM shutdown in North America would slash its production by 112,000 vehicles a week, and its profits by US$190 million a week. Other estimates run as high as $250 million a week. If the strike continues, it will begin to affect the US steel industry. GM is the biggest single user of steel in the US, buying 6 million tonnes a year.