General Motors and Ford have won permission from the United Auto Workers union to close three assembly plants and to sell or close five other facilities under terms of the four-year contract agreement struck last week, Monday’s Wall Street Journal (WSJ) reported.
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In a contract summary prepared by the union, the UAW reportedly said it gave GM clearance to close a Baltimore, Maryland, assembly plant that builds vans and employs about 1,100 workers.
According to the WSJ, the UAW is also allowing GM to close a car parts factory in Saginaw, Michigan, and to sell a GM division that builds railway locomotive engines.
The union also said that it will allow GM to close the Argonaut Building, a Detroit structure that once housed photographic and real-estate offices, the report said, adding that, in total, about 3,000 GM workers are affected.
According to the Wall Street Journal, in UAW contract language, Detroit vehicle makers are generally forbidden from closing, selling or consolidating manufacturing facilities without the union’s consent.
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The ‘Big Three’ car makers, under growing pressure from Japanese and European competitors, pushed in contract negotiations for the right to reduce plant capacity to help them restore profitability, the WSJ noted.
At Delphi Corporation, GM’s former parts unit, the UAW reportedly said it successfully resisted a company proposal to consolidate six facilities, according to the Wall Street Journal.
Ford told the WSJ it had won UAW approval to close or sell four plants, affecting 4,500 people. The report added that Ford will close two assembly plants: a small pickup-truck factory in Edison, Illinois, which employs 863, and a full-size van plant in Lorain, Ohio, that has 1,640 workers. Ford will also close Vulcan Forge in Dearborn, Michigan, and Cleveland Aluminium Casting in Ohio, the Wall Street Journal said.
The report noted that Ford will, however, keep open a suburban Saint Louis, Missouri, assembly plant that it had planned to close in the middle of the decade – the Hazelwood facility employs 2,600 people and assembles the Ford Explorer and Mercury Mountaineer SUVs.
Missouri governor Bob Holden, in a statement, reportedly said the state had finished negotiations to help secure a major investment in the assembly plant, the Wall Street Journal noted.
The WSJ said that DaimlerChrysler, in its deal with the UAW, got union clearance to close or sell five of nine operations the company has deemed uncompetitive, affecting about 4,700 workers.
