cloudyn.png
Saturday January 25th, 2020 5:34AM
10:43PM ( 6 hours ago ) Weather Alert

Analyst says strike cost GM $1B; Mexican pickup plant closes

By The Associated Press
Related Articles
  Contact Editor

DETROIT (AP) — The 16-day strike by auto workers has cost General Motors about $1 billion, an analyst says, while a parts shortage forced the company to close pickup truck and transmission plants in Mexico.

Spokesman Dan Flores confirmed that production at the factories in Silao, Mexico, ended Tuesday morning, affecting 6,000 workers.

The strike has cost GM just over $1 billion thus far, JP Morgan analyst Ryan Brinkman estimated Tuesday in a note to investors.

The plant shutdowns mean that GM has lost any new supplies of its light-duty Chevrolet Silverado, the company's top-selling U.S. vehicle. Earlier GM had to close a Mexican engine plant and an assembly plant in Canada due to the strike.

The strike by over 49,000 union workers is now in its third week, and both sides are feeling the impact. Workers are having to get by on $250 per week in strike pay instead of their normal base pay of about $1,200 per week.

GM's losses are mounting each week the strike continues, costing about $480 million in the first week and another $575 million in the second, Brinkman wrote. The company is losing $82 million per day, he calculated.

GM books revenue from building vehicles as soon as they change hands from the factory to the company that ships them to dealers. So revenue has been counted already for nearly all vehicles that are in dealer hands. Many dealers stocked up before the strike and report having plenty of inventory.

The Silao plant shutdown puts more pressure on GM to bring an end to the strike, but it has to balance the short-term losses against extra costs that could come from settling the strike, said Kristin Dziczek, vice president of the Center for Automotive Research, an industry think tank in Ann Arbor, Michigan.

"Short-term, this is costing them, absolutely," Dziczek said. "It goes back to cost versus principles. Are the things that they would have to give to end the strike precedents that they would be living with for decades to come?"

Brinkman wrote that GM could recover some of its lost profits by increasing production in the fourth quarter once the strike comes to an end. But the company likely will be limited to add production of vehicles that already are in high demand or where new models are being launched, such as GM's heavy-duty Chevy Silverado or GMC Sierra pickup trucks, Brinkman wrote.

GM's pickup truck and large SUV plants already were working six or seven days per week to meet demand before the strike, so increasing production will be difficult.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News
© Copyright 2020 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Jury convicts ex-police officer who fatally shot neighbor
A white former Dallas police officer who said she fatally shot her unarmed, black neighbor after mistaking his apartment for her own has been found guilty of murder
1:51PM ( 9 minutes ago )
Dazed and confused deer gets trapped in Italy's resort shop
A dazed and confused deer has been trapped in a clothing store in the fashionable mountain resort of Cortina d'Ampezzo, on the Italian Dolomites, blocking the local shopping street, before been saved and freed
1:37PM ( 23 minutes ago )
Analyst says strike cost GM $1B; Mexican pickup plant closes
The 16-day strike by auto workers has cost General Motors about $1 billion, an analyst says, while a parts shortage forced the company to close pickup truck and transmission plants in Mexico
1:36PM ( 23 minutes ago )
Associated Press (AP)
Court: FCC can dump net neutrality, but can't bar state laws
A federal court is ruling that the Federal Communications Commission had the right to dump net-neutrality rules, but couldn't bar states like California from enacting their own.
1:21PM ( 38 minutes ago )
US court: FCC had the right to dump net-neutrality rules
A federal court is ruling that the Federal Communications Commission had the right to dump net-neutrality rules, but couldn't bar states like California from enacting their own.
1:07PM ( 52 minutes ago )
The Latest: French minister: No-deal Brexit most likely
France's foreign minister says that a no-deal Brexit is "the most plausible" possibility for the moment
12:43PM ( 1 hour ago )
AP Business
Survey: US manufacturing activity sank to decade-low
Survey: US manufacturing activity in September sank to lowest level since Great Recession
11:11AM ( 2 hours ago )
Juul stops funding San Francisco vaping measure
Juul Labs says it will stop supporting a ballot measure to overturn an anti-vaping law in San Francisco, effectively killing the campaign
3:33AM ( 10 hours ago )
Peru president dissolves congress amid anti-corruption push
Peruvian President Martín Vizcarra dissolved congress Monday, exercising seldom used executive powers to force the opposition-controlled legislature that he accuses of stonewalling attempts to curb widespread corruption out of office
10:43PM ( 15 hours ago )
AP Business - Corporate News
Jury convicts ex-police officer who fatally shot neighbor
A white former Dallas police officer who said she fatally shot her unarmed, black neighbor after mistaking his apartment for her own has been found guilty of murder
1:51PM ( 9 minutes ago )
Dazed and confused deer gets trapped in Italy's resort shop
A dazed and confused deer has been trapped in a clothing store in the fashionable mountain resort of Cortina d'Ampezzo, on the Italian Dolomites, blocking the local shopping street, before been saved and freed
1:37PM ( 23 minutes ago )
Weak report on US manufacturing knocks stock market lower
A surprise contraction in US manufacturing last month knocked the stock market lower Monday, erasing an early rally.
1:32PM ( 28 minutes ago )
Mets' Alonso donates customized cleats to 9/11 museum
Mets star Pete Alonso visits 9/11 museum to donate custom first-responder cleats and baseball bat he used in game on 18th anniversary of attacks
1:28PM ( 31 minutes ago )
UPS gets government approval to become a drone airline
UPS now has a license to call itself a drone airline, although widespread use of the devices for deliveries is still years away
1:26PM ( 33 minutes ago )