Special Report

UAW logo2007 UAW
Labor Talks

The United Auto Workers union is on track for an Oct. 10 conclusion of ratification votes on its historic tentative contract with General Motors Corp.

The deal, which ended a 2-day strike, establishes a 2-tier wage structure and a benefit fund that will relieve GM of some $50 billion worth of liabilities, also sets out a framework for its product pipeline. The deal tentatively commits GM to new product rollouts at 16 U.S. plants, while declaring a moratorium on actions that would cease production at all but three sites – two powertrain plants in Livonia, MI, and Massena, NY, and a service and parts operation in St. Louis.

In addition to closure, the moratorium includes sales, spinoffs and consolidation.

While observers warn the product promises are contingent on market conditions, they shed light on numerous programs that were only vaguely understood previously.

“They’ve laid out a pretty detailed plan and some things are very interesting,” says David Cole, chairman of the Center for Automotive Research in Ann Arbor.

Arguably, the most telling element of the document calls for the addition of the Gamma small-car and Alpha rear-drive platforms at the auto maker’s Lordstown, OH, assembly plant. That facility builds the Chevrolet Cobalt and Pontiac G5, currently underpinned by the Delta small-car platform.

Those vehicles long have been considered unprofitable and ripe for outsourcing to another country, victims of GM’s massive health-care obligations and its uncompetitive wage structure vis-à-vis key rival Toyota Motor Corp.

“This contract says you can build a small car profitably in the States,” Cole says. “That to me says this is a new game.”

Other highlights include:

  • Commitment to build the Chevy Volt plug-in hybrid vehicle at GM’s assembly plant in Hamtramck, MI, beginning in ’10. Hamtramck also gets a Delta-based multipurpose vehicle in 2009.
  • Confirmation that GM will build a Chevrolet variant on its Lambda platform, which underpins the hot-selling Buick Enclave, GMC Acadia and Saturn Outlook trio of cross/utility vehicles.
  • Disclosure GM’s facilities in Delta Twp., MI, and Spring Hill, TN, will benefit from the new Chevy Lambda, with production set for 2011.

A UAW document that details the product programs suggests the fate of GM’s assembly plant in Wilmington, DE, remains a mystery. The plant currently builds the Pontiac Solstice and Saturn Sky.

The document, posted on the website of a dissident UAW group, suggests those vehicles – the sole programs assigned to Wilmington – have no future beyond 2012.

The Orion Twp., MI, plant, which is building the Pontiac G6 and will add the Chevrolet Malibu later this year, appears to face uncertainty beyond 2013.

GM declines comment.

“It’s not uncommon for a lot of information to be circulating during the rollout of a tentative agreement,” a spokesman says. “It would be inappropriate for comment about details regarding the agreement, or any future product plans.”

Meanwhile, rank-and-file response to the deal is positive, but not overwhelming. The deal has passed everywhere votes have concluded, but margins have not been inspiring given the significance of the deal to GM.

The Detroit News reports Local 95, which represents workers at GM’s Janesville, WI, assembly plant, voted 62% in favor of the agreement, while just 57% of voters at Local 31 in Fairfax, KS, gave their approval.

Janesville and Fairfax are recipients of two high-profile product programs. The former retains production of GM’s fullsize pickup and large SUV lineups, while the latter gets new Buick and Saturn cars as well as a large 4-door Chevrolet notchback set for production in 2010.