UAW Local 696 Strike Update

03/15/96

The number of GM workers waiting for the nation's richest automaker to settle a dispute with 3,000 striking workers grew to 100,000 today, as the automaker shutdown more of its auto assembly plants. Only a few of the company's 23 U.S. plants were still operating as parts got used up. More shutdowns are expected before the strike is resolved, and industry analysts report that the automaker is likely to lose 50 million dollars per day because of lost production.

The 3,000 workers who are out on strike belong to UAW Local 696 and work at two Delphi Chassis plants in Dayton, Ohio where they make brakes. The strike was provoked by GM's plans to buy parts from external plants rather than to invest in existing facilities or an existing workforce. The practice of buying parts from external suppliers is called "outsourcing." The union has identified the practice as one of the major issues on the bargaining table as workers move into triennial contract negotiations with the big three automakers.

Local 696 is on strike specifically because GM has refused to drop plans to outsource brake parts that can be made at the plant. GM wants not only to shift brake production out of the Ohio plants, but actually to send the work out of the country: they plan to buy the parts from Robert Bosch GmbH, a German supplier. The union protest is aimed at saving 128 jobs in the Ohio plants. The striking workers point out that the Ohio plants are money makers for GM. They think the automaker should invest in the plants rather than try to cut back. The workers also want the company to make good on promises it made to settle a similar strike in 1994, when it agreed to hire more workers at the plants and to drop plans to outsource parts that could be made by GM workers. In a statement released on Wednesday, Richard Shoemaker, Vice President of the UAW, reminded the automaker that "GM's continued success is due in great measure" to the efforts of the company's employees.

News reports on the strike have paid special attention to how the strike affects economic interests other than those of GM. Several reports have remarked on plant closings and layoffs at AlliedSignal, a major GM seat belt supplier, The Detroit-based American Axle & Manufacturing Inc., and Lear Corp, a seat manufacturer. The U.S. steel industry is also keeping a close eye on the strike, although they have not yet reported any slowdown in production or sales.

Reuters reported that Diane Swonk, chief economist at First Chicago NBD Corp., estimated that the strike will cut March's gross domestic product growth by 0.2 to 0.3 percent. She also said, however, that any difference would probably be made up in the second quarter, as strikes displace economic activity rather than destroying it.

Paul Dever -- The Auto Channel