General Motors Corp. is walking a fine line between keeping Wall Street sure of the automaker's restructuring pledge and pacifying the United Auto Workers.
GM's avoidance of a potentially devastating UAW strike in Anderson, Ind., is the latest example of the dilemma. A strike there _ averted after an agreement was reached late Friday _ could have shut down all of the automaker's North American plants at a cost estimated at $200-million a week.
To buy labor peace, GM has given the UAW a say in the company's massive downsizing, trading new jobs for vague assurances of increased productivity at Anderson and at a Lordstown, Ohio, plant.
But the company's concessions don't set well with some Wall Street brokerage houses that must decide whether to recommend GM stock to their customers. To varying degrees, they think GM needs to take a hard line with its largest union to quickly get its downsizing out of the way.
Because GM's master agreement with the UAW requires that parts workers be paid the same as assemblers, it is costly to add new jobs. GM promised 240 new jobs at its Inland Fisher Guide bumper-making operation in Anderson.
"The settlement really contributes to the company's current high-cost position," David Garrity, an analyst with McDonald & Co. Investments in New York, said Monday. "I wouldn't necessarily attribute it as good news."
Seventy percent of GM's parts are made in company-owned union shops, compared with 50 percent at Ford Motor Co. and 30 percent at Chrysler Corp.
The integration between GM and its parts operations makes the automaker especially vulnerable to labor trouble. In addition to bumpers, the Inland Fisher Guide division plants in Anderson supply 95 percent of GM vehicles in North America with turn signals and other exterior lighting.
Four strike threats since Aug. 20 prove the UAW is not letting GM call the shots alone on its downsizing.
GM "is acknowledging that there are limits to the ways it can carry this out," said Harley Shaiken, a labor professor at the University of California at San Diego. "GM's intent was to downsize rapidly and retain the good will of its union.
"At issue isn't whether GM downsizes but the way it does so."
GM has 44 percent of the vehicle-building capacity in the United States and roughly 35 percent of the market. And that doesn't count competition from cars and trucks imported to the United States. GM's goal is to eliminate 20 percent of its factory space by 1995.
Analysts say the UAW knows it can't stop the 21 plant closings announced last December, nor can it do much to drastically reduce the 54,000 blue-collar jobs GM is committed to cutting in the United States. So the union is using unresolved local grievances to affect longer-range issues.
In Anderson, that meant reviving a bumpermaking operation that had been given up for dead. Factory usage will rise in exchange for the UAW's pledge to improve productivity.
"I think this settlement has positive implications for UAW-GM locations across the system," said Dave Toombs, a UAW spokesman.