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UAW Gains in Small Car Fight

Union to build GM’s new subcompact, and could see some shuttered plants re-open.

by on May.29, 2009

GM spent years debating whether to build a U.S. version of the Asian Chevrolet Spark, shown here. Concessions from the UAW now will make it possible. GM also will keep several shuttered assembly lines mothballed, rather than closing them permanently.

GM spent years debating whether to build a U.S. version of the Asian Chevrolet Spark, shown here. Concessions from the UAW now will make it possible. GM also will keep several shuttered assembly lines mothballed, rather than closing them permanently.

The United Auto Workers has used its residual clout to force General Motors Corp. to build a new class of small, so-called “B-” class subcompact cars in the United States.

UAW president Ron Gettelfinger said the union now has a firm commitment from General Motors to build a new small car in the U.S., instead of China or South Korea, as had been planned. The UAW had objected to GM’s plans, both publicly to Congress, and privately to the President Barack Obama’s Auto Task Force, which is now the decisive voice shaping auto policy.

“Small cars represent one of the fastest-growing segments in both the U.S. and around the world,” said Fritz Henderson, General Motors President and CEO as GM confirmed the new small car will indeed by built in the U.S.  “We believe this car will be a winner with our current and future customers in the U.S.,” Henderson added.

The conventional wisdom has long held that American manufacturers cannot make money on small cars, especially if they are built in the U.S., where labor rates and productivity have been non-competitive with foreign, and especially Asian manufacturers.  But the numerous concessions made by the union, in recent years, and especially recent givebacks meant to turn the domestic industry around, have changed the equation.

Subscribe to TheDetroitBureau.com“There is absolutely no reason “B” and “A” class cars can’t be built right here,” said Gettelfinger, during a press conference at UAW headquarters, in Detroit. “There is no reason for these companies not to build small car is this country and we’re going to remind them of it every day,” he said. (more…)