Word: gm
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Dates: during 1990-1999
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Even to experts, the economy displays two faces, both of which are on view in Flint, Michigan. It is the site of General Motors' Buick City works, which is central to all GM auto production because it makes parts for assembly plants throughout the country. Buick City, in turn, was the scene in late September of a strike that, says Roach, "was symbolic of an issue that is really at the core of the debate right now: do workers get to reap the benefits of the improved efficiencies that they are delivering to employers...
Eight years ago, after the closing of GM's Fisher Body plant, Michael Moore's sarcastic film Roger & Me portrayed Flint as a dying community. But since then U.S. automakers have turned themselves from the world's highest- cost producers to those with the lowest costs: only $42 in wages for each $100 in product turned out, about a third below Toyota or Mercedes-Benz. They have won back so many motorists who once bought foreign cars that the share of the U.S. market going to imported autos has fallen from 22% in 1991 to under 14% now. Profits...
...GM, and for other companies, the economics work out. Overtime is expensive, of course; many autoworkers are earning $65,000 to $70,000 a year, and electricians on plant-maintenance crews working seven-day weeks can push their take above $100,000. But the combined wage, fringe benefit and training costs of hiring new workers would be more expensive still. Consequently, GM has done no significant hiring since 1986, once more pushing to an extreme a common trend. Since the recovery from the last recession began in March 1991, the U.S. economy has created almost 6 million new jobs...
Finally, when it absolutely could not avoid adding workers, GM at Buick City and elsewhere turned to temporary-help agencies, which now supply blue-collar workers as well as stenographers, computer operators and other office hands. Once more the reason is economics: "temps" draw only wages, not health insurance and other expensive fringe benefits, and they can be used and let go as needed, without drawing the supplementary unemployment benefits GM and other companies must pay to laid-off regular workers...
...road, which could cost $1 billion. The government action is also a supremely bad p.r. for the company, which forced NBC to back down on the techniques used in their story that alleged just such flaws in the trucks' design. "It's a big legal headache for GM," says TIME Detroit reporter Joseph R. Szczesny. Aside from the possibility of a recall, "it opens up the possibility of lawsuits against the company." A GM spokesman called Pena's statements an "unfortun