GM's total cost for Axle strike: $2.82 billion
Local strikes cost automaker another $200 million
Craig Trudell
Automotive News
May 23, 2008 - 9:45 am ET
UPDATED: 5/23/08 4:05 p.m. EDT
The UAW strike against American Axle & Manufacturing Holdings Inc. cost General Motors a total of $2.82 billion, according to a report GM filed today with the Securities and Exchange Commission. GM estimated that it suffered a $1.8 billion impact in the second quarter alone. That's on top of $800 million from lost production during the first quarter and another $215 million in assistance GM offered to American Axle to finance employee buy-downs and buyouts. GM said the strike resulted in a combined production loss of about 330,000 units in the first and second quarters. The automaker expects that only a portion of the loss in production will be recovered because of the U.S. market's shift away from the trucks and SUVs affected by the strike, the report said. The strike at American Axle caused work stoppages and slowdowns at as many as 30 assembly and parts operations. That does not include a number of operations that were struck by the UAW over apparently separate local contract issues. Some experts speculated those local strikes were designed to pressure GM to help settle the American Axle contract. GM said it expects to make up a second-quarter production loss of 33,000 units caused by the local UAW strikes. The strike at two assembly plants that produce GM's popular sedans and crossovers caused another $200 million impact, the report said. The loss in production at the Delta Township assembly plant near Lansing, Mich., and at its Fairfax assembly plant in Kansas City, Kan., will be recovered over the rest of the year, the report said. The Delta Township plant, which resumed production May 19, makes the Buick Enclave, GMC Acadia and Saturn Outlook crossovers. The Fairfax plant resumed production of the Chevrolet Malibu and Saturn Aura sedans three days later. GM today fell 4.5 percent, dropping 83 cents to $17.60 on the New York Stock Exchange. |
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