GM, Ford Win UAW Permission to Close or Sell Plants

DETROIT September 21, 2003; Sholnn Freeman writing for Dow Jones reported that General Motors Corp. and Ford Motor Co. won permission from the United Auto Workers to close three assembly plants and to sell or close five other facilities under terms of the four-year contract agreement struck last week, Monday's Wall Street Journal reported.

In a contract summary prepared by the union, the UAW said it gave GM clearance to close a Baltimore assembly plant that builds vans. The factory employs about 1,100 workers. The UAW is also allowing GM to close an auto-parts factory in Saginaw, Mich., and to sell a GM division that builds locomotive engines. The union also said that it will allow GM to close the Argonaut Building, a Detroit structure that once housed photographic and real-estate offices. In total, about 3,000 GM workers are affected.

In UAW contract language, Detroit auto makers are generally forbidden from closing, selling or consolidating manufacturing facilities without the union's consent. The Big Three auto makers, under growing pressure from Japanese and European competitors, pushed in contract negotiations for the right to reduce plant capacity to help them restore profitability.

At Delphi Corp. GM's former parts unit, the UAW said it successfully resisted a company proposal to consolidate six facilities.

Ford said it won UAW approval to close or sell four plants, affecting 4,500 people. Ford will close two assembly plants: a small pickup-truck factory in Edison, Ill., which employs 863, and a full-size van plant in Lorain, Ohio, that has 1,640 workers. Ford will also close Vulcan Forge in Dearborn, Mich., and Cleveland Aluminum Casting in Ohio.

Ford will keep open a suburban St. Louis assembly plant that the auto maker had planned to close in the middle of the decade. The Hazelwood, Mo., facility employs 2,600 people. The Ford Explorer and Mercury Mountaineer are assembled at the plant. In a statement, Missouri Gov. Bob Holden said the state has finished negotiations to help secure a major investment in the assembly plant.

DaimlerChrysler AG , in its deal with the UAW, got union clearance to close or sell five of nine operations the company has deemed uncompetitive. About 4,700 workers at the company are affected.