Strike in India to shutter GM Delta Plant next week

October 29, 2009

Strike in India to shutter GM Delta Plant next week

Shortage of parts to idle more than 2,700 here; Ford plant also affected

Melissa Domsic
mdomsic@lsj.com

A strike at a parts supplier in India has forced General Motors Co.’s Lansing Delta Township plant to temporarily shut down next week.

More than 2,700 workers will go on layoff starting Monday, with an expected return date of Nov. 9, GM spokeswoman Heidi Magyar said.

The plant, which makes the GMC Acadia and Buick Enclave crossovers, is experiencing a shortage of transmission parts from Rico Auto Industries Ltd.

Roughly 2,000 workers at the India-based supplier went on strike more than a month ago, resulting in plant closures for GM and Ford Motor Co., said Tom Balogh, an account manager at Clarkston-based Rico North America.

About 3,000 people work at the company’s main complex in Gurgaon, India.

"Based on the Indian newspaper reports that we’ve gotten, and also our discussions with government officials and the union, it looks like they made very good progress (Wednesday) and meetings are scheduled for (today) and Friday," Balogh said.

A Ford assembly plant in Oakville, Ontario, closed this week as a result of the Rico strike, and expects to resume production next week, said Ford spokesman Todd Nissen.

GM’s Warren transmission plant was expected to shut down for the remainder of this week and run on one shift next week, GM spokesman Chris Lee said.

Lee said he did not have any details on potential alternative suppliers.

The Delta Township plant closure is "manageable," said auto analyst Erich Merkle of Grand Rapids-based Autoconomy.com.

"One week shouldn’t be a problem; they should have sufficient inventory on the vehicles," he said. "The problem is if they get drawn out."

Some maintenance work will continue at the plant, but production will halt, said Brian Fredline, president of United Auto Workers Local 602, which represents workers at the Delta Township plant.

"We are experiencing the effects of outsourced suppliers, and we would hope that they would be able to resume production as quickly as possible so we could in turn resume production," Fredline said.

Bloomberg News reported that a Rico official in India said some workers walked out demanding the reinstatement of 16 employees who were suspended for misconduct.

Rico’s Balogh said the strike was sparked by a labor union that’s trying to organize more labor in order to gain political power.

Although Rico workers are not unionized, Balogh said the company does not object to organized labor.

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