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Latest News - September 2010

September 29, 2010
GM Indy Plant Deal Fails
Source: The Detroit News
By: Louis Aguilar

A months-long battle to save a General Motors Co. stamping plant in Indianapolis ended bitterly, with UAW Local 23 members voting 456-96 against a deal to sell the factory and accept pay cuts negotiated by regional and national union leaders.

Addison, Ill.-based JD Norman Industries said Tuesday it is dropping its effort to buy the factory, which means the 80-year-old plant will close next year.

Workers interviewed by The Detroit News last week said they were voting to reject the proposed five-year agreement because they didn't want to lose their right to transfer to another factory when openings occur and keep their current pay levels. Local 23 leaders held a rally Saturday outside the UAW Region 3 office, which includes Indianapolis, to protest the concessions.

"This whole process has been corrupted by the international (union)," said Jeff Klingerman, 56, an Indianapolis tool-and-die maker.

JD Norman's plan called for continuing to make fenders, hoods and other metal pieces for GM, as well as seek business from other automakers. Employees refused to accept an almost 50 percent pay cut to $15.50 an hour, from $29, for production workers and a 27 percent wage reduction to $24, from $33, for skilled trades workers.

Under the plan, GM workers could transfer and keep their pay levels the same for up to two years. Indianapolis employees who worked for Norman would keep their GM seniority and get a cash bonus as high as $35,000 for accepting the pay cut.

"Clearly, we are disappointed in the final outcome," JD Norman Industries owner Justin Norman said in an e-mail statement. "While we are withdrawing from pursuing the plant any further, we continue to hold the employees at the facility in the highest regard and wish them the best in their respective futures."

At least one state politician has charged that the vote also means more layoffs at other Indiana auto suppliers, such as steel supplier Nucor.
Indiana Secretary of Commerce Mitch Roob told the Indianapolis Business Journal Tuesday that GM Indy workers have "turned their backs on the next generation of employees."
"It's bad for Indiana, it's really bad for Indianapolis, and the ... workers there walk away with no harm," Roob added.

Maurice Davison, director of UAW Region 3, has argued the concessions would save jobs and the number of employees could eventually triple to 2,000. The pay levels would be competitive with second-tier wages at other GM facilities, he has said.

The supplier wanted to buy and continue operating the Indianapolis Metal Center, which is scheduled to close in October 2011 as a result of GM's 2009 bankruptcy.
But most UAW Local 23 members -- who for months panned the deal -- preferred to close the plant and maintain their cpay levels.

The Indianapolis vote could complicate the ability of Liquidation Motors Co. -- the "old" GM -- to sell 16 factories and other assets the "new" GM left behind in bankruptcy. One auto and one labor analyst each said the Indianapolis vote has the potential to resonate at other plants.



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