A local strike on Monday at General Motors' Fairfax plant near Kansas City threatens production of one of GM's hottest-selling vehicles, the Chevrolet Malibu, at a time when the industry is struggling because of the sluggish economy.
Sales of the Malibu were up 40% in April compared with a year ago, and transaction prices on the cars are up 30%, the automaker says.
Disrupting production of a strong-selling, profitable model at a time of collapsing auto sales is "stupidity of the highest order" on the part of the United Auto Workers union, says David Cole, chairman of the Center for Automotive Research.
It is the second GM gm plant making popular vehicles to be struck by the UAW recently over issues not covered in the national contract ratified last year. Workers have been out nearly three weeks at GM's plant in Delta Township, Mich., near Lansing. It makes GM's Buick Enclave, GMC Acadia and Saturn Outlook crossovers.
The Fairfax plant, which employs about 2,200 workers, makes the Saturn Aura sedan and is one of two plants making the Malibu. GM's Orion Township, Mich., factory also builds Malibus.
"We are obviously disappointed that UAW Local 31 took strike action at Fairfax Assembly," says Dan Flores, a spokesman for GM. "From a GM perspective, we remain focused on reaching an agreement in Fairfax and in Lansing/Delta Township as soon as possible."
Says Cole, "I have no comprehension of what's going on. One of the theories is that this strike was an attempt to get GM to step up to the plate with American Axle … but that's nearing the end. So I don't know what's going on."
The UAW has been on strike since Feb. 25 against American Axle axl, a key supplier spun off by GM 14 years ago. That walkout has stopped or slowed production at more than 30 GM plants. There had been speculation that GM would be pulled into helping settle the standoff. Both sides are back at the bargaining table, however, and that strike is expected to end soon.
Also, production most affected by the American Axle strike has been that of GM's large trucks and truck-based SUVs. Sales of those vehicles have plummeted as gasoline prices remain high. The automaker said last week that it's taking advantage of the American Axle strike to keep production levels low to avoid creating overstocks.
Last year, GM worked out a national contract with the UAW that set up a two-tier wage system, paying workers who will do non-core jobs, such as janitorial services, less than workers who put vehicles together. Workers struck at GM for two days over the national contract.