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GM Shutters All but Three NA Plants in Face of Sustained UAW Strike

Oct. 2, 2019
GM has suspended plants in Mexico and Canada as their disagreement with the UAW shows few signs of detente.

The strike at General Motors Co.’s U.S. operations is far from settled, according to the union, casting a darker cloud over a carmaker watching losses pile up and the impact of the walkout spread.

In a letter Tuesday, United Auto Workers Vice President Terry Dittes said GM made a proposal the night before, but told members the offer “did not satisfy your contract demands or needs.” The UAW made the letter public just after the automaker announced it was forced to shut down a plant in Mexico making highly lucrative pickups.

“Regardless of what is publicized in print or social media, etc., there are still many important issues that remain unresolved,” Dittes wrote.

GM’s latest bid for a four-year labor deal fell short on job security, health care benefits, wages and how to manage temporary workers and skilled trades employees, the letter said. The union made a counter proposal and is waiting for GM’s response.

A GM spokesman responded by saying the company will “continue to negotiate and exchange proposals, and remain committed to reaching an agreement that builds a stronger future for our employees and our company.”

Pressure Building

As the strike wears on, both GM and the union’s members are feeling more pressure. For GM, it’s reaching a point where it may struggle to make up for lost production. Union workers meanwhile haven’t gotten a paycheck since Sept. 20 and are now living on $250 a week from strike funds.

The longest U.S.-wide strike in almost half a century at the automaker has lasted 16 days and cost GM $1 billion so far, according to JPMorgan analyst Ryan Brinkman. By the second week of the strike, most of GM’s North American plants were shut down.

One important factory that remained operational, a truck plant in Silao, Mexico, stopped work Tuesday due to parts shortages, and its 6,000 employees are being temporarily laid off. The facility builds the Chevrolet Silverado and GMC Sierra pickups, which are all-new and just ramping up to full production.

Workers at the plant, which is about 370 kilometers (230 miles) northwest of Mexico City, will take vacation or be placed on leave while getting paid a percentage of their salary, a spokeswoman said.

GM’s shares closed down 3.7% to $36.11, the biggest drop since the day after the strike began.

Still Running

Only three GM assembly plants are still running in North America, said Dan Flores, a company spokesman.

A factory in Ingersoll, Ontario, and two in Mexico -- in Ramos Arizpe and San Luis Potosi -- are operational and should be able to keep going for an indefinite period, Flores said. Those plants make SUVs including the Chevrolet Equinox and Blazer models, and the GMC Terrain.

In the U.S., 46,000 UAW workers are striking. As a result, GM has temporarily laid off 3,600 workers in Canada.

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