General Motors Corp. Chairman Roger B. Smith sharpened his demands for major wage concessions from the United Auto Workers today, calling the company's labor costs its most serious problem.
"Over the years the earnings of U.S. autoworkers have gotten too far out of line with our foreign competition," Smith said at GM's annual shareholders meeting, citing an $8 hourly differential between the wages of GM workers and Japanese autoworkers.
"We must reduce this huge labor cost handicap we have in America if we are to avoid losing more jobs to Japan," said Smith. He renewed GM's proposal to create a profit-sharing plan for union employes in exchange for wage and benefit "give-backs" by the employes, whose contract with GM empires in September 1982.
Douglas Fraser, president of the UAW, has said the union will not consider concessions in its current contract, particularly with GM -- by far the strongest of the American auto manufacturers.Each automaker's economic condition will be taken into account when a new contract is negotiated, Fraser has said. Smith's remarks are another indication that GM -- like Ford Motor Co. -- doesn't want to wait until late 1982 to get the kind of wage concessions the ailing Chrysler Corp. received from the UAW.
Smith also laid down a tough challenge to GM's American and foreign competitors, saying his company is on schedule with its $40 billion investment campaign to modernize its production plant.
Before the introduction of GM's new line of J-car models, the Chevrolet Cavalier, Pontiac J2000 and Cadillac Cimarron, which went on sale last week, GM had three modernized plants producing front-wheel-drive cars. There will be 10 by the end of 1981, Smith said.
But one plant conversion in particular has stuck in GM's throat at least temporarily -- a plan to build a new Cadillac plant in a depressed neighborhood called "Poletown" on the border of East Detroit and Hamtramck. n
Part of the site is Chrysler Corp's abandoned Dodge Main plant, but the rest is a cluster of homes, shops and churches that must be razed to make room for GM.
As shareholders entered the Fisher Auditorium at midday today they were greeted by about 50 demonstrators attacking the Poletown project. The protesters carried signs that read, "GM -- mark of destruction," Pole-town is not a parking lot" and "General Motors -- General Haig: Two of a kind." Organizers of the protest called for a national boycott of Cadillac dealers.
Inside the meeting, Smith was peppered with questions from shareholders: Why hadn't GM chosen another site? Why should federal taxpayers have to pay $200 million to Detroit to clear the site? and Why should GM get 12 years of relief from local taxes?
Smith said the site was small compared with those of other new auto assembly plants and that there were no alternatives within Detroit's city limits. The new plant will replace an existing World War I vintage Cadillac plant in Detroit that cannot be operated profitably, he said. GM hopes to employ 6,000 workers at the new plant, although its contract with the city would permit the company to hire about half that many.
Smith asserted that most of the 3,500 people who will be forced to move are "delighted to be rescued from homes they couldn't sell," an assessment that several Poletown protesters heatedly disputed.
Finally, he said many communities that complete for new plants offer tax abatements. In Detroit, GM is receiving only half of the maximum tax abatement permitted by local law.
The GM shareholders also heard some discussion about airbags. After leading in the development of the airbag crash-protection system in the mid-1970s, GM this year shelved its program.
Vice Chairman Howard Kehrl said that after building 110,000 airbags, the company had questions about the system's effectiveness. Safety changes were made in the airbags, but their manufacturing cost soared to $1,100 apiece from an original $300, he said.
Other airbag manufacturers still contend the bags could be massproduced for several hundred dollars each.