Workers at GM's Fairfax plant walk over seniority issues
KANSAS CITY, Kan.—A strike Monday by a United Autoworkers local at the General Motors plant here could endanger production of the popular Chevrolet Malibu sedan, adding to mounting problems for the automaker.
Employees at the Fairfax plant, which has more than 2,500 UAW members, set up pickets in medians and at the gates of the sprawling plant, and vowed to stay out for as long as necessary to get a contract.
The strike is particularly important to GM because the plant produces the Malibu, a medium-sized sedan that was named "Car of the Year" at this year's North American International Auto Show in Detroit.
The redesigned 2008 Malibu has posted strong sales since its launch last fall, as drivers reacting to high gasoline prices and the struggling economy move away from trucks and sport utility vehicles.
The strike comes on the heels of another walkout that began April 17 at a GM plant in Delta Township near Lansing. Other UAW locals in Wyoming and Warren, Mich., and Mansfield, Ohio, are negotiating.
Jeff Schuster, executive director of global forecasting for J.D. Power and Associates, said GM needs to settle the local union strikes quickly because it has only a 30- to 40-day supply of Malibus and 40- to 50-day supply of the large crossover vehicles such as the Buick Enclave. A 60-day supply is optimal by industry standards.
"These are going to start impacting volume as well as market share and profits," he said.
GM announced last week that it lost $3.3 billion in the first quarter, due largely to one-time charges and North American losses that offset gains in the rest of the world.
The company had pinned some if its hopes for a rebound on the Malibu. From January through April, GM had sold 58,126 Malibus, up 32 percent from the same period last year. Sales were up 55 percent in April.
GM spokesman Dan Flores in Detroit said the company will consider increasing Malibu production at its Orion Township, Mich., plant.
But Schuster said increasing Malibu production at that plant would reduce output of the Pontiac G6 mid-size car, which is made at the same factory.
Seniority rights were the main issue cited by workers who struck Fairfax on Monday and some said they hope their work on the Malibu would pressure GM to end the strike quickly.
"It is in our favor that we make the Malibu," said C.J. Griffin, 50, of Gladstone, as other strikers nodded in agreement. "It's the company's number one car and I don't think GM can keep us idle for too long."
Industry analysts have speculated that the UAW is trying to pressure GM to coax American Axle and Manufacturing Holdings Inc. into ending a bitter nine-week strike.
GM accounts for 80 percent of American Axle's parts business. About 3,600 UAW workers at five American Axle plants have been on strike since Feb. 26.
Gary Chaison, a labor specialist at Clark University in Worcester, Mass., said that by striking at Fairfax, UAW is applying pressure to get the American Axle deal done. The union had to use the GM strikes as leverage because the American Axle strike was going largely unnoticed due to slumping pickup truck and SUV sales, he said.
"Bargaining has intensified a great deal, and I think what the UAW is trying to do is just wrap it up," Chaison said Monday.
Chaison predicted the American Axle strike would end within a week, followed quickly by deals in Kansas City and Delta Township.
But Jeff Manning, president of the UAW local 31 that struck the Fairfax plant, said Monday's action had "nothing to do with" the Axle walkout.
"We would have put pressure on earlier had it not been for American Axle," Manning said. "We have our issues and they have their issues. We fully support them and we hope they support our efforts."
Manning said the strike would last until seniority rights were protected.
GM shares fell 84 cents, or 3,6 percent, to $22.36 in trading Monday.
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Associated Press Writer Tom Krishner in Detroit contributed to this report.
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