General Motors Targets Mexico Plant Amid UAW Crisis

Strikers at the Detroit Hamtramck plant

Strikers at the Detroit Hamtramck plant

With the United Auto Workers' strike against General Motors in its third week, pressure is mounting on both sides to reach a deal, with the company losing an estimated $1 billion and workers living on $250 per week in strike pay - about one-fifth of what they usually make.

The union has replied that buying power of the wages of GM workers have not kept pace with inflation in the decade since GM's bankruptcy and with the company making substantial profits workers expect to make up what they lost.

Also on Tuesday, GM said the strike by USA workers forced it to halt production at its pickup and transmission plants in Silao, Mexico, resulting in temporary layoffs of 6,000 workers.

GM said in a statement it continues "to negotiate and exchange proposals, and remain committed to reaching an agreement that builds a stronger future for our employees and our company".

The union has been firm on its stand that a proposal submitted by General Motors did not satisfy the necessities in the worker contract. Earlier GM had to close a Mexican engine plant and an assembly plant in Canada due to the strike.

GM books revenue from building vehicles as soon as they change hands from the factory to the company that ships them to dealers. JPMorgan analyst Ryan Brinkman said the auto giant will most likely recover some of its losses if it moves to shift production from the third quarter to the final quarter of this year. "Most importantly, fewer pickup truck sales will impact Q3 and now Q4 profits at GM since pickup trucks account for the bulk of the income". So revenue has been counted already for almost all vehicles that are in dealer hands.

Almost 50,000 USA workers are on strike at GM due to a United Auto Workers conflict over the labor contract, now in its third week. On late Monday evening, the union confirmed GM passed along a "comprehensive" proposal but declared it wasn't good enough.

GM contends that its workers already the best paid in the auto industry in the US and it has offered and array of bonuses and improvements in profit sharing as well as more than $7 billion in new investments for new products at a time when the industry is undergoing massive changes.

The strike has shut down many of GM's 22 US parts warehouses, but some remain open, staffed by management.

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