Union, GM Deal Would Close One Plant

DETROIT – General Motors Corp.'s (GM) 68-year-old Baltimore assembly plant is the only major GM factory targeted for closing as part of the automaker's new tentative agreement with the United Auto Workers (search), union local presidents were told by UAW bosses.

The local officers were in Detroit on Sunday to hear highlights of the proposed four-year labor pacts announced Thursday with GM, the world's largest automaker and the last of the Big Three automakers to reach an agreement, and with the automotive supplier Delphi Corp. (DPH)

According to a UAW-produced document prepared for the officers and obtained by The Associated Press, GM has identified three facilities for shuttering: the Baltimore plant, which has about 1,100 UAW workers; a powertrain plant in Saginaw with 378 employees; and the Argonaut Building, an aging office structure in Detroit.

GM builds the Chevrolet Astro (search) and GMC Safari (search) vans in Baltimore. The plant's future was uncertain because GM had no work assigned to it beyond 2005. That's now when it is scheduled to close.

During negotiations, Delphi, which was spun off from GM in 1999, proposed consolidating six facilities, the document says. The supplier proposed merging two plants in Flint; its Tuscaloosa, Ala., plant into an operation in Lockport, N.Y.; and an Olathe, Kan., facility into Fitzgerald, Ga.

"The UAW resisted this proposal and Delphi withdrew it," the UAW document says. "Nevertheless, the company notified the union that it intends to raise the issue of potential consolidation of these facilities during the term of the 2003 agreement."

GM has 115,000 active UAW workers; Delphi has about 30,000.

Company representatives have declined to discuss details of the proposed pacts.

GM and Delphi, along with Ford Motor Co. (F), DaimlerChrysler AG's (DCX) Chrysler Group and other suppliers, are under intense pressure to reduce overhead and improve productivity as Asian and European rivals continue to expand in North America.

Ford and Chrysler also plan to sell or close several plants as part of tentative agreements reached last week with the UAW. The goal is to reduce the glut of North American manufacturing capacity and better align supply and demand.

The 1999 pacts banned plant closings.

The UAW entered negotiations with GM wanting assurances that the automaker would continue choosing Delphi for new business as opposed to nonunion suppliers. GM is Delphi's biggest customer.

According to the UAW document, GM agreed to award about $1 billion in new business to Delphi, though the timeframe wasn't given.

In exchange, the document says, "the UAW and Delphi agreed to a series of actions aimed at making Delphi a more quality-minded, competitive and viable company for the long term."

Specifically, Delphi and the UAW will meet within 90 days of contract ratification to discuss lower pay for new Delphi hires in the United States. Such an agreement would create a two-tier wage scale at the world's largest supplier, where base wages are higher than those for many competitors.

The proposed four-year contracts between the UAW and GM, Ford, Chrysler, Delphi and supplier Visteon Corp. (VC) still require ratification by rank-and-file members. That process is expected to take place in the next week.