Tentative deal reached that could settle GM-Kansas City strike that began May 5

DETROIT May 20, 2008; Tom Krisher writing for the AP reported that General Motors Corp.'s string of labor problems could soon come to an end with a tentative agreement reached Tuesday at a key assembly plant in Kansas City, Kan.

GM reached the deal on a local contract with United Auto Workers Local 31 at the plant Tuesday evening, company spokesman Dan Flores said.

About 2,500 workers have been on strike at the factory, which makes the hot-selling Chevrolet Malibu as well as the Saturn Aura, since May 5. Although the UAW settled its national contract with GM last fall, local contracts that govern work rules, overtime and other items are negotiated at each location.

Local 31 President Jeff Manning said workers will hear information about the deal Wednesday and vote the same day. When they return to work depends on the outcome, but he said the local leadership is recommending approval.

"We believe this will work," he said of the deal. "It's a great relief. All our members are professional auto workers and they would like to go back to work. That's what they want to do."

Flores said he did not know when production would resume.

"We're certainly pleased that we have a tentative agreement," he said. "Obviously, Malibu and Aura are very important products for us."

The midsize Malibu, which is also manufactured in Orion Township, Mich., is a big bright spot for GM as it tries to catch buyers fleeing from sport utility vehicles and pickup trucks due to high gas prices. The car also is giving GM a foothold in a market long dominated by Toyota Motor Corp. and Honda Motor Co.

In the first four months of this year, GM sold 58,126 of the redesigned 2008 Malibus, up 37.2 percent from sales of the old model in the first four months of 2007.

At the end of April, just before the Kansas City strike began, GM had only a 36-day supply of Malibus, according to Ward's AutoInfoBank. A 60-day supply is considered optimal in the industry. New inventory figures for May won't be available until early June.

Industry analysts have said the strike in Kansas City and one at a key crossover vehicle plant in Delta Township, Mich., were designed to draw GM into a long, bitter strike by the UAW against parts maker American Axle and Manufacturing Holdings Inc. Union officials, including UAW President Ron Gettelfinger, denied any connection and said the strikes were over local contract disputes.

The UAW and American Axle reached a tentative agreement Friday, and several locals voted Monday to approve the pact. A large local in Detroit votes Thursday.

Production resumed Monday in Delta Township after workers ratified a tentative agreement reached May 15.

American Axle makes axles, drive shafts and stabilizer bars for GM's large SUVs and pickup trucks. The 12-week strike at five American Axle facilities crippled GM's production and caused thousands of layoffs at GM and other parts suppliers.

GM said it lost $800 million in the first quarter and produced 230,000 fewer vehicles due to the strike.

The automaker kicked in about $218 million to help settle the American Axle strike.

Associated Press Writer Margaret Stafford in Kansas City, Mo., contributed to this report.