The Strike Takes Further Toll
The United Auto workers (UAW) strike at American Axle and Manufacturing Company, chief auto part suppliers to General Motors, which started on the 26th of February, may cause the shutdown of the first car assembly plant. The threat of the temporary closure of another one looms large too.
General Motors, on 28th March, authenticated the news that the Detroit-Hamtrack Assembly plant, which builds Cadillac DTS and Buick Lucerne Sedan, will face temporary shutdown form the 31st of March onwards. Another plant in Lordstown, Ohio that was involved in the assembly of the Chevrolet Cobalt and Pontiac G5 may also meet a similar fate by April 4th , due to the lack of brake parts, seeing as no signs of improvement in dialogue between UAW and American Axle has occurred.
At the start of the strike it seemed as if this situation would prove to be a good opportunity for General Motors to gets its inventories streamlined. A short strike was on the contrary pretty welcome, as it would enable GM to liquidate their inventory of unsold trucks and SUVs in the time period that their plants lay idle. However the prolongation of this strike has started to affect things in a more permanent way. Analysts have already started boosting the predicted losses that GM may face as a result of this strike. The only thing that is saving the situation is the fall in car sales that would have forced GM to slow down production in any case.
The strike has already caused seven GM light truck assembly plants to shut down, along with 22 other parts operations in North America. A whole host of other suppliers have also slowed or made idle their plants as a result of this shut down.
While GM acknowledges the losses caused by this seemingly interminable strike, they still believe that they can tide over this crisis without any disastrous outcome.
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