GM ENGINE STALL
Nationwide strike silences 33 factory sites
The maker of Chevrolet and Cadillac cars saw 33 US plants stop production across nine states after 49,000 factory workers voted to strike for higher wages and more jobs.
The nationwide strike — which also closed 22 General Motors distribution warehouses — marked the first organized protest by the United Automobile Workers union in 12 years following a vote on Sunday that sent GM workers to the picket lines.
GM shares fell 4.2 percent, to close at $37.21 per share, as the long-threatened strike became a reality.
Negotiators for the carmaker and union continued talks Monday as workers stayed home or walked around GM factories waving protest signs, including one that read “UAW On Strike.”
A key point of the talks is GM’s decision last November to close four US factories — a move that prompted criticisms from President Trump, who has aggressively courted voters in the Rust Belt.
The president on Monday told reporters he hoped the strike would be short-lived after taking to Twitter to urge the UAW and GM to “get together and make a deal!” GM spokesman Tony Cervone said the automaker “couldn’t agree more” with Trump’s call, according to Reuters.
Trump, who has attacked GM for Chief Executive Mary Barra’s decision to stop building small cars at an assembly plant in Lordstown, Ohio, met with Barra ahead of the strike deadline, Reuters said.
Ohio and Michigan, where GM is headquartered, are both swing states and key to the 2020 presidential election.
The UAW also wants higher pay for its members and a limit on the number of temporary workers, who currently make up about 7 percent of GM’s workforce.
On its Web site, the UAW griped that its members were striking “after years of tirelessly helping GM reach record-level profits,” while “GM refuses to give even an inch to help hard-working middle-class families.”
GM countered that it needs the flexibility provided by temp workers, since its average full-time employee earns about $90,000 a year — well above the US median of $61,000.
The strike comes amid a federal corruption probe into top UAW executives that has raised embarrassing questions about the use of union funds for personal expenses, including by President Gary Jones. Last month, the FBI raided the Jones home in Canton, Mich., according to the Detroit Free Press.
BofA Merrill Lynch analyst John Murphy said it was unlikely the strike would have an immediate effect on consumers, as North American GM dealers have about 83 days worth of inventory on their lots.
While the strike could have “some teeth,” Murphy said, “We believe it may ultimately be short-lived, as the common interests of stability and profit sharing have served the UAW ... since the industry implosion of 2009.”
Nevertheless, Credit Suisse analyst Dan Levy estimated Monday that GM will lose about $50 million in earnings for each day of lost production.
GM could make up the loss of a short strike by ramping up production, Levy said.
But a longer-than-expected strike could severely shrink the $12 billion in North American earnings forecast for GM this year, he added.