UAW Strike Update

03/11/96

The Associated press reported that a UAW strike against GM has resulted in the closing of 11 plants due to parts shortages. The striking workers belong to UAW local 696 and work at two Delphi Chassis brake manufacturing plants. All of GM's North American auto assembly plants, except for a Corvette plant in Bowling Green, Kentucky, use brakes put together by the striking workers. More than 30,575 GM employees are currently waiting for the Nation's biggest automaker to resume formal discussions with the union so that disputes that involve taking work away from union plants and workers ("outsourcing"), job security, and safety issues can be resolved.

Last Friday Reuters reported that David Healy, Burnham Securities analyst, said that GM stood to lose $250 million a week if the strike continues to shut down GM plants. Healy explained that GM has previously acquiesced to union demands; he expects the automaker to do the same this time. He also pointed out, though, that GM inventories are currently bloated: the automaker reported an average supply of 106 days worth of cars (86 days worth of trucks) on dealer lots in February. The industry considers a 60 day supply of vehicles to be ideal. With the overstock, the automaker might feel that it has enough leeway to leave the workers hanging for a few days.

Paul Dever -- The Auto Channel