GM Hit by Strike at Chevy Malibu Plant

May 5, 2008
Malibu sales are up 29%

The United Auto Workers launched a strike on May 5 at a key General Motors Corp. assembly plant, halting production of one of GM's most profitable and popular models, GM said.

GM spokesman Dan Flores said the strike is at the Fairfax, Kan.-based plant that makes the Chevrolet Malibu, a medium-sized sedan that was named "Car of the Year" at this year's North American International Auto Show in Detroit. "We are certainly disappointed that UAW local 31 has taken this action. We remain focused on reaching an agreement," Flores said.

Officials from UAW Local 31 were not available for comment but the Local's website cited an impasse over issues related to the seniority rights of individual employees and the use of subcontractors.

Mark LaNeve, vice president of GM North America Vehicle Sales, Service and Marketing, said last week that consumer demand for passenger cars such as the Malibu were picking up despite the weak U.S. economy. Chevrolet Malibu total sales were up 29% with retail sales up 147%, he added.

The Kansas strike is the latest work-stoppage to batter the company, which has posted billions of dollars of losses amid sinking U.S .auto market demand in a sluggish economy beset by higher energy and food price. GM announced last week that it lost $3.3 billion in the first quarter, due largely to one-time charges and North American losses.

Part of the loss was due to the company's labor woes, which include a strike at a key supplier, American Axle and Manufacturing Holdings Inc., where the UAW has been on strike since February 26.

A local strike in Lansing, Mich., that began April 16 also has shut down production for more than two weeks at GM's newest assembly plant. The strike at the Delta Township plant has halted production of the Buick Enclave, Saturn Outlook and GMC Acadia, crossover vehicles that are replacing more gasoline-inefficient sport-utility vehicles in the automaker's lineup.

Sean McAlinden, vice president of research at the Center For Automotive Research in Ann Arbor, Mich., said GM had been trying to use the local negotiations to reduce staffing and to re-classify more jobs as "non-core," which means GM can fill them with employees making half the standard contract wage of $29 per hour.

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