DETROIT, JULY 27 -- General Motors Corp. and the United Auto Workers union opened contract talks here today in what both sides called the most critical labor negotiations in modern U.S. auto history.
The talks go beyond replacing the current agreement, which expires Sept. 14. At issue is whether the nation's largest auto maker can continue producing most of its U.S.-market vehicles in the United States.
The future of 379,000 hourly GM workers, 350,000 of them represented by the UAW, depends on how the union and company deal with that issue. But because each auto factory job generates an estimated two outside jobs, some 758,000 additional U.S. workers could be affected by the GM-UAW negotiations, according to figures compiled by the Motor Vehicle Manufacturers Association of the United States.
"These negotiations couldn't be more critical to our members and their families, and to our union and nation as well," said UAW President Owen Bieber. "Our overriding objective in these talks is to build a structure of job security that ensures that GM remains not only accountable to its workers, but to the American community."
GM is the nation's largest industrial employer, operating 210 plants and related facilities in 30 states and 125 U.S. cities. The company is also a multinational behemoth, with 18 plants and related facilities in Canada and facilities in 33 other countries. In addition, GM has production and distribution interests in several Japanese car companies, including Isuzu Motors Ltd., Suzuki Motor Co. Ltd. and Toyota Motor Car, and is half owner of South Korean auto maker Daewoo Motor Co.
GM officials contend that the rapid rise of foreign competition abroad and in the United States -- where nine foreign auto makers will be building vehicles by 1990 -- is forcing the company to rely more on outside suppliers for cars and parts. GM's Asian partners now supply the company with an estimated 300,000 small cars annually, and its outside suppliers, foreign and domestic, contribute at least 30 percent of the parts used in GM products.
GM's strategy is to remain a full-line provider of cars and trucks while reducing dependence on more costly products and parts made and handled by the UAW. But GM officials say they are also trying to retain as many UAW jobs as possible by getting more cost-effective work rules and other production efficiency.
For those reasons, this newest round of labor talks promises to be "the most difficult," said Alfred S. Warren Jr., GM's vice president in charge of industrial relations. "We're going to have a very, very difficult time -- not particularly because we're angry at each other, but rather because we are faced with a grave problem."
GM, the most vertically integrated of the Big Three auto makers, will push for provisions to control its component-manufacturing costs. Those provisions could include more "outsourcing" -- the production of parts by outside contractors -- as well as more flexible work rules, GM officials said.
Bieber agreed that any future contract must help to improve GM's competitive posture. He said that the union is keenly aware of GM's precipitous decline in U.S. auto market share -- now down to 38 percent from a high of 50 percent.
But improving that posture must not involve sitting on the workers, who went without profit-sharing last year while GM's top executives collected a total of $169 million in bonuses, Bieber said.
The UAW opens negotiations Tuesday with Ford Motor Co. on a contract that expires Sept. 14. The issues are similar to those at GM, even though auto industry analysts believe that Ford, in part because it paid workers $2,100 apiece in profit sharing last year, will have an easier time of it. Chrysler Corp. does not negotiate with the UAW until next year