General Motors Corporation Free Essay Example

General Motors Corporation

It is Multinational Corporation headquartered in the United States. General Motors is world’s most dominant automakers, which is in existence since 1931. The General Motors planned to reduce the employees in order to avoid last minute tension with the major parts supplier Delphi. During 2006 it was planned to reduce 35,000 employees in the companies of its own and subsidiary i. e. Delphi, major parts supplier. For this purpose, it designed a plan offering cash incentives of up to $35,000 to take retirement.

GM accounted loss of $39 billion during February 2008. It is the biggest loss. GM offered buyouts to all its United Auto workers i. e. UAW members. Near about 73,000 are workers are under the United Auto Workers who are working at 70 GM plants. There were planned to strike after completion of four-year contract, which was in September 14, 2007. So it is the not first time. It is long pending process. GM not faced strike since 1998.

Present position

The suppliers such as American Axle & Manufacturing Holdings Inc, Magna International Inc.

Lear Corp. and Delphi Corp. have strong links with GM. United Auto Workers in New York and Michigan went on strike on February 26 2008 after failing negotiations with the American Axle and Manufacturing Holdings Inc. The strike involved with around 3,600 workers of the American Axle. It comprises five American Axle plants in Michigan and New York. It should be noted that the GM holds 80 percent of America Axle’s business.

It means the GM is main holder of America Axle’s business. The strike began in five GM plants.

The work disturbed and simultaneously plants such as truck assembly plant at southwest Allen County and Mishawaka stopped their production. The general motors estimated 17,000 hourly workers would be affected by the shutdowns. The closure of the plants effects on automotive related businesses. Such closure of plants effect on GM sales for at least next couple of months. Toledo Transmission plant also scheduled to close. Due to this effect, the company responded to cut the production in North America about 5 percent I the second quarters which amounts 1.08 million vehicles.

Conclusion

The workers of United Auto Workers went on strike on February 26 and the strike caused the General Motors to announce temporarily close of six plants with Mishawaka factory. The factory involves making Hummer vehicles for the automaker. Interestingly the closure of GM plants effects more than 17,000 workers and most of them are in lay off positions. But it will be short strike, still the talks expected to resume on Thursday, 6th March 2008. The shut down of plants in the United States and Canada also which affects thousand of workers.

The workers main demand is creation of Wage Bridge, which allows earning more to the low paid hire works. The reason for strike is mainly for wage disputes. Since the strike continued, American Axle supplying parts to GM besides other companies i. e. Chrysler LLC and other automakers. There is no certainty how long the supplier will supply the parts and depends upon the availability and shipping. The GM has to depend upon the suppliers but it is only up to 20%, because the American Axle is only main supplier, hence the strike badly effects on GM.

As far as the latest news the American Axle & Manufacturing Holdings Inc and United Auto Workers union are holdings talks by the weekend. However the General Motors who is the largest customer to American Axle will intervene to end the 11-day strike. The American Axle strike hits 29 GM plants.

Reference

1. http://www. truthout. org/cgi-bin/artman/exec/view. cgi/58/18543
2. http://www. manufacturing. net/GM-Strike-Tests-Suppliers. aspx
3. http://www. journalgazette. net/apps/pbcs. dll/article? AID=/20080305/BIZ/803050382

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