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3,400 Workers Strike at GM Parts Plant

June 06, 1998|From Times Wire Services

DETROIT — Harry J. Pearce, the man believed to be in line to succeed John F. Smith Jr. as chairman of General Motors Corp., has been diagnosed with leukemia, company officials said Friday.

The announcement came as GM workers went on strike Friday at a parts plant here, a move that could cut 55% of the world's largest auto maker's North American production within days.

About 3,400 United Auto Workers members walked out after failing to reach agreement with GM on $300 million in plant investments and job cuts. The plant makes hoods, fenders and other stamped parts for factories that build GM's profitable full-size trucks and sport-utility vehicles.

Talks are scheduled to resume at 9 a.m. local time today, GM spokeswoman Mary Irby said.

While the strike could shut down 16 assembly plants and cost GM $300 million a week in lost profit, analysts aren't expecting a dragged-out fight that hurts earnings. They see the walkout more as a reflection of a rocky relationship with UAW as GM tries to make its plants more efficient and profitable.

Investors also took GM's latest labor trouble in stride. The auto maker's stock fell 19 cents to close $75.25 on the New York Stock Exchange.

GM said Pearce, 55, who oversees Hughes Electronics and other non-automotive businesses at the automotive giant, is continuing on the job.

But if his health worsens, it could raise questions about who will assume the leadership of the world's largest industrial company when Smith retires.

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