A Stricken Strike
The General Motors strike rumbles on. Some analysts expect it to stretch into August, threatening the company's production of 1999 models. But atmospherics in the talks seemed to improve last week.
It's hard to see any winners from this strike. Idled auto workers have lost more than $150 million in pay so far. GM is said to be losing $75 million a day. Consumers will soon be losing the opportunity to buy GM cars or trucks they may prefer. That could damage GM in the long run, as customers switch their loyalties to other carmakers.
So why does the strike drag on? Largely because the issues revolve around "globalism," the economic byword of the late 20th century. Both sides feel their future hangs in the balance.
The United Auto Workers, a union which has seen a sharp slide in membership in the last two decades, wants to stop the migration of jobs abroad. Its strike centers on GM parts plants in Flint, Mich. These are among the facilities threatened by "outsourcing" of production to places where labor costs are a fraction of UAW wages.
The union's concerns are understandable. But they collide with current economic trends. GM, a lumbering giant that has excess productive capacity and work force in the US, is trying to do what its domestic competitors, Chrysler and Ford, have already accomplished - build in more efficiency and flexibility.
Trouble is, GM is doing this late in the game, and with a history of poor labor relations acting as a drag. GM is still No. 1 among car builders. But its share of the US market, 50 percent in the 1970s, now hovers around 30 percent.
The union may figure this is the right time to win a fight with GM - just when it's about to introduce new products to boost the market momentum it has started to regain. The union wants the firm, which still has billions of dollars in cash, to follow up on pledges to make significant new investments in US factories.
The company responds that it plans new investments, but that any commitment of capital has to be linked to changes in union work rules that breed inefficiency and sap profits. Case in point: rules in the parts plants that allow workers to get a full day's pay for less than a full day's work, so long as they fill a production quota.
Such rules should go. In return, GM should move ahead with improvements in its domestic plants, and strive to make the union more of a partner in its long-term plans. Those plans may well include further reductions in the company's US work force. The union has to recognize this, and do what it can now to forge a relationship with GM that won't give that company - and perhaps others - an incentive to accelerate moves abroad.