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GM Faces Fight With Unions
Over Layoffs at Ailing Saab
FRANKFURT -- A year after unions forced General Motors Corp. to scale back a restructuring of its main European operations, the U.S. car maker is potentially facing another battle to push through layoffs at its ailing Saab Automobile unit in Sweden.
GM, the world's largest auto maker, said last month it would eliminate 1,300 jobs at Saab, 17% of the unit's work force, in a bid to stanch losses of several hundred million euros this year.
A top representative of GM's European work force, however, said the job cuts must be done through early retirement and voluntary departures, not layoffs, as a result of an agreement hammered out last year as part of the restructuring of the company's Opel unit.
"No forced dismissals, no plant closings," said Klaus Franz, chairman of the Opel workers council and a committee of GM's European workers.
A letter outlining the unions' interpretation of the Opel agreement and the implications for Saab's restructuring has been delivered to GM's European human-resources chief in Zurich, according to Thomas Kleba, a senior labor representative.
GM could be in for a long and costly turnaround at Saab if the union digs in its heels. A Saab spokesman, Christer Nilsson, said the 1,300 planned job reductions would "probably end in some forced layoffs. We can't achieve that number through attrition alone."
Last year, GM hired Carl Peter Forster from Bayerische Motoren Werke AG to overhaul Opel. He originally aimed to close at least one of the unit's eight automobile plants and shed close to 10,000 workers. In the end, Opel kept all eight plants and agreed to no forced layoffs. About 2,000 jobs are being eliminated through attrition and early retirement.
The agreement covering the Opel restructuring, which is known as the Olympia project, covers Saab as well and was signed by Saab's top union and human-resources officials as well as Messrs. Franz and Kleba.
Saab has been a problem for GM since it bought into the Swedish car maker 12 years ago. Saab, which has had only two profitable years since 1990, suffers from a narrow product line -- it makes only two models, both premium sedans -- and stiff competition. While too expensive to compete in the mainstream market, Saab also has trouble drawing customers from the two top premium brands, BMW and DaimlerChrysler AG's Mercedes-Benz division.
BMW and Mercedes have ramped up sales by expanding into roadsters and sport-utility vehicles, putting a crunch on second-tier premium-car makers such as Saab. Ford Motor Co.'s Jaguar brand is expected to have a loss of about $500 million (€486.9 million) this year. Land Rover, Ford's maker of upscale off-road vehicles, is expected to post a loss, too.
"The trouble is, GM has been trying to revive Saab for a few years now. Up to now, they haven't really succeeded," said Michael Raab, an automotive analyst at Sal. Oppenheim & Cie. in Frankfurt. "They will definitely have to succeed with this turnaround."
Saab, which had a loss of $131 million in the first half of 2002, was hurt by the weak economy, a weaker U.S. dollar and a disappointing launch of its sporty model, the 9-3. Dealers already are discounting leases on the vehicle, only months after it hit the streets. Saab had spent heavily to retool its main manufacturing plant to build the 9-3, too.
The 9-3 also was supposed to help open a string of downtown showrooms in major American cities, but that plan was scrapped. Through November, Saab has sold only 102,397 vehicles. It once had forecast sales of 140,000 units this year and 200,000 units by 2005.
Labor and management plan to begin discussing the outlines of a restructuring plan in January and hope to have an agreement by March. Job reductions would take effect by the autumn of 2003.
posted by 68.48.242...
, Tue, 24 Dec 2002 10:30:13
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