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UAW rejects pay cuts; local GM plant could close

September 27, 2010

Union employees at General Motors' Indianapolis metal-stamping plant have overwhelmingly rejected a proposed pay cut that would have kept the facility open.

United Auto Workers Local 23 voted 457 to 96 against a contract with Illinois-based JD Norman Industries, union observers said Monday.

The vote means General Motors won't be able to sell its Indianapolis metal-stamping plant to Norman Industries, and the automaker may proceed with its plan to close the plant by September 2011.

"We are satisfied that the members of UAW Local 23 were allowed the opportunity to vote on JD Norman’s contract proposal," said company CEO Justin D. Norman in a prepared statement released Monday evening. "Clearly, we are disappointed in the final outcome. While we are withdrawing from pursuing the plant any further, we continue to hold the employees at the facility in the highest regard and wish them the best in their respective futures."

The votes were counted Monday by the American Arbitration Association and observed by members of Local 23, said Gregg Shotwell, the author of a labor newsletter called "Live Bait and Ammo." Shotwell, a GM retiree who lives in Grand Rapids, Mich., said he learned about the count from local observers on Monday.

The vote, held by mail-in ballot, was arranged by higher-level UAW officials. Region 3 Director Maurice "Mo" Davison could not be reached for comment Monday afternoon.

The Norman Industries contract would have cut unskilled workers' wages by about 50 percent, to $15.50 per hour. UAW national officials promoted the contract as a way to keep the plant open and grow the membership in Indianapolis. Davison has said in the past that he hoped under Norman Industries' ownership, employment would grow from less than 650 to 2,000.

Shotwell, who is also co-founder of Soldiers of Solidarity, a UAW dissident group that lobbies against workers accepting concessions, said the local rank-and-file recognized that any additional work for the Indianapolis plant would come at the expense of other GM plants. UAW members from various locals converged on Indianapolis on Saturday for a rally at the Region 3 headquarters, said Shotwell, who attended the rally.

The "no" vote doesn't necessarily mean UAW members will be out of a job. Many of them already are eligible for retirement. Those who can't yet retire from GM have the right to transfer, once GM officially dsignates Indianapolis as a closed plant.

One group of workers who may have voted to work for Norman Industries are the 60 temps, who currently earn less than $15.50 per hour.

GM has been planning to close or sell the 2-million-square-foot plant west of downtown for three years.

The facility employs about 640 hourly workers.

As IBJ reported last week, closing the plant could cost GM $50 million or more due to the cost of removing and possibly relocating the massive presses and dies used there now.

Some observers have speculated that the automaker, which has emerged from bankruptcy and is preparing for a public stock offering, might need the production capacity from the Indianapolis plant after all.

“They didn't lose as much market share as they thought they would in bankruptcy,” said Tracy Handler, a market analyst at IHS Global Insight in Detroit.

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