General Motors CEO says strike is bad idea

GM has plans for a lot more restructuring, the chairman said.
DETROIT (AP) -- General Motors Corp. Chairman and Chief Executive Rick Wagoner said Tuesday that the world's biggest automaker has stockpiled parts in case Delphi Corp. workers go on strike but he believes a strike can be avoided.
"I'm really not a strong advocate of relying on that as a potential solution here. We would rather do this proactively and without strikes," Wagoner said. "We do have some banks of parts, but we're speaking a matter of days, not months, so it's not a question of avoiding the issue for any significant period of time."
"We strongly believe there are solutions that will work for all the parties," he added.
In an interview with a small group of reporters at GM's headquarters in Detroit, Wagoner said making a profit in the first quarter was a milestone, but that GM still has a lot of restructuring to do.
"That's not the big deal for us," Wagoner said. "The big deal for us is significant improvement in all the operating regions of the world."
Better financial picture
GM shares rose $1.69, or 7 percent, to close at $25.24 on the New York Stock Exchange after Deutsche Bank lifted GM one notch to "hold," citing recent moves to generate liquidity and progress with its restructuring.
On Monday, GM revised its earnings report for the first quarter, saying it earned $445 million in the January-March period thanks to some accounting changes. Last month, GM reported a preliminary first-quarter loss of $323 million for the period.
Wagoner said the situation at Delphi remains "a big point overhanging the stock price and outlook for the company."
Delphi, GM's former parts division and largest supplier, was in federal bankruptcy court Tuesday asking a judge for permission to cancel its labor contracts. The United Auto Workers and other unions have threatened to strike if those contracts are thrown out, and UAW members are voting this week on whether to authorize a strike.
Delphi has proposed dropping U.S. hourly workers' wages from $27 an hour to $16.50 per hour, with GM supplementing part of that wage. Without GM's contribution, Delphi says it is only prepared to pay its workers $12.50 an hour.
Wagoner said GM needs to help Delphi with retiree benefits and opportunities for workers to flow back to GM, but the automaker hasn't agreed to supplement Delphi's wages.
"I'm not sure that's the optimal scenario," he said.
Wagoner said GM is more focused on paying less for the parts it gets from Delphi. He said GM is currently paying $2 billion more in parts than it would on the open market.
"That's the payback for us in getting this to a fair resolution, so we're focused on how to do that," Wagoner said.
Topics to be discussed
Wagoner is scheduled to meet with President Bush later this month along with the heads of Ford Motor Co. and Chrysler Group. Wagoner said educational training, exchange rates, energy, health care and other issues that hurt U.S. automakers' competitiveness will be on the agenda.
He wouldn't say whether he supports Bush's request to Congress to allow the White House to develop new fuel economy standards for passenger cars. The corporate average fuel economy -- or CAFE -- requirements for cars have held steady at 27.5 miles per gallon since 1990. Bush raised standards for pickup trucks and sport utility vehicles earlier this year.
Wagoner said it's more important for GM to figure out new technologies on its own, such as hybrid and ethanol-powered vehicles. He added that GM is more interested in getting Washington to focus on energy policy questions, like how to produce and distribute more ethanol.
"We continue to have the view that CAFE, with the benefit of 30 years of hindsight, has been a crutch that people have relied on instead of solving issues and problems," Wagoner said.
"We continue to think it's a misguided policy with literally nothing to show for 30 years, and built around the false premise that one can regulate energy policy changes without having anyone make any changes or sacrifices."
Despite rising gas prices, Wagoner said GM plans to stick to its strategy of keeping prices low and offering fewer incentives. GM will have some sort of discount to clear vehicles off the lots as the model year ends this summer, he said, but buyers won't see anything like the employee discounts they saw last summer.
"It began to be too much of a driver of the business," he said.
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