Analysis: Big Three To Shed 50,000 Jobs In Next Four Years

By Agence France-Presse The Big Three domestic automakers, General Motors, Ford Motor Co. and DaimlerChrysler's Chrysler unit, could shed 50,000 jobs over the next four years under the terms of new labor contracts, according to an analysis by Goldman Sachs. Analysts with the Wall Street investment bank calculated that the closure or divestitures of 10 to13 parts and assembly plants provided for under new labor contracts, plus regular attrition, could result in the loss of 50,000 hourly jobs in the United States. "The UAW is resigned to declining Big Three membership as the cost of Big Three viability in the face of intense import-brand competition," notes Goldman Sachs analyst Gary Lapidus. "In return, the UAW maintained job security for individual members by restricting productivity gains and plant closings to the rate of attrition." On the plus side, Lapidus said he expects the Big Three, particularly GM, to achieve world-class labor productivity by the end of the new four-year contract or soon thereafter. But increasing productivity would likely be offset by higher cash wages, and the problem of excess capacity will continue to dog automakers and depress prices, Lapidus said. The Big Three tentatively agreed to the terms of new four-year labor contracts with the United Autoworkers union (UAW) last week. The three separate contracts have yet to be ratified by rank-and-file UAW members. Copyright Agence France-Presse, 2003