GM preps for strike at Delphi

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Jan 7, 2002
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DETROIT -- General Motors Corp. is ramping up production even as its sales fall sharply, a move that could help the automaker stockpile enough cars and trucks to weather a possible strike by union workers at Delphi Corp.

According to Delphi workers and officials with other suppliers, GM has boosted orders for parts, forcing some parts plants to run on overtime to keep pace.

At the same time, GM is operating several assembly plants on overtime after increasing vehicle production 8 percent in October despite a 26 percent sales dip.

The moves come as United Auto Workers President Ron Gettelfinger told union leaders this week in Detroit that Delphi's demand for huge wage and benefit cuts are a "road map to conflict," according to a letter distributed Thursday to union workers.

Delphi, GM's largest U.S. supplier, has indicated it will ask the bankruptcy court to void its union labor contracts if the sides don't reach an agreement by Dec. 16. If that happens, the UAW is free to call a strike that could cripple Delphi and severely hinder production at GM and other automakers.

GM acknowledged Thursday it is preparing for a strike. "We are looking at contingency plans and ways to protect our supply," said GM spokesman Stefan Weinmann, declining to elaborate.

"Clearly, our priority is to see that everything continues as normal," he said.

In recent weeks, GM has boosted orders for parts from Delphi and other suppliers, which could allow the automaker to keep building vehicles if Delphi's 33,000 U.S. hourly workers walk off the job.

One vice president for a GM supplier who asked that his name not be published said, "the volumes are way up. They are higher than we have ever seen them. With the way sales have been, you know something is going on here."

Plant workers at Delphi's Kokomo, Ind., facilities said parts for GM vehicles are being stockpiled -- a stark contrast from the days' or hours' worth of parts that suppliers typically keep on site to avoid the cost of storing them.

"I've been told we have a month or a month-and-a-half supply ready to go," said Brian Stoner, a production worker for Delphi in Kokomo. "We're seeing some of the more critical parts go through at a heavier pace."

Jim Peters, a UAW committee man for Delphi in Kokomo, said bigger orders started pouring in the week after Delphi filed for bankruptcy on Oct. 8. "We usually don't have that much overtime, and then, bam! All the sudden we have a few weeks in a row," Peters said. "This time of year, orders are never up."

Workers at Delphi plants in Saginaw, Coopersville, Indianapolis and Dayton, Ohio, also said orders have increased in recent weeks.

"I don't know what they're doing, but I know we're going into work on Saturday," said Dave Scherer, a Delphi production worker in Dayton.

Shelly Lombard, an industry analyst with Gimme Credit Publications in New York, said the increased production could be a sign that GM is refilling its pipeline after a summer of incentive-fueled sales. But it may also mean GM is protecting itself from potential troubles at Delphi.

"It makes all the sense in the world," she said. "The last thing they need right now is a supply disruption."

GM lost more than $4 billion in North America in the first nine months of the year and is counting on vehicles such as a lineup of redesigned SUVs to lead a rebound. http://www.detnews.com/2005/autosinsider/0511/04/A01-372068.htm