General Motors brass considered several options to help strike-bound supplier
American Axle & Manufacturing Holdings Inc., but decided the most practical
and ethical plan was to offer $200 million in assistance, a top GM executive
said.
“There were a number of us involved in it and in the discussions, and
collectively we evaluated several options. There were several levels of
engagement and we thought that this would be the right thing to do and the right
time to do it,” Troy Clarke, president of GM North America, told Workforce
Management's sister publication Automotive News in an interview.
The 10-week-old strike by 3,650 UAW members at five American Axle plants has
idled or slowed work at 31 GM plants in North America—primarily light-truck
operations.
After saying for weeks that it would not get involved in the dispute, GM
changed course on Thursday, May 8, and offered $200 million to help American
Axle sweeten its buyout and buy-down offers for the rank and file. American Axle
has sought cuts in pay and benefits approaching 50 percent, and GM’s assistance
could be crucial in mitigating those cuts and gaining worker approval of a new
contract.
GM no longer has any legal obligation to American Axle employees, Clarke
said. The decision to help American Axle was both practical and ethical, he
said. GM said the strike cost it $800 million in the first month alone.
“We thought it was in our best interests and the best interest of all parties
to do something positive and helpful in trying to encourage the parties to reach
a resolution,” Clarke said.
He said all work stoppages are painful—it just depends on the degree of the
pain. GM was able to withstand the immediate impacts of the strike because of
high light-truck inventories.
“Did we have a high truck inventory? Yes, that’s a true statement,” Clarke
said. “Did it bleed off some of that inventory that we may have had to bleed off
otherwise? I think that’s a fair statement too.
“But I don’t think it’s the kind of thing where we were on the sidelines
saying, ‘Wow, I hope the strike lasts another two weeks because it gets me down
to my inventory number.’”
Clarke said that GM has other ways to winnow inventory and that strikes are
very volatile.
“Labor issues are complex, and [it’s] very tough to talk about these kinds of
things in the press,” he said. “I do know one thing: The strike will eventually
end.”
Filed by Jamie LaReau and Philip Nussel of Automotive News, a sister
publication of Workforce Management. To comment, e-mail editors@workforce.com.
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