General Motors has elected to try to end a 10-week-old strike that has closed plants and halted production of some vehicles. United Auto Workers (UAW) union members at America Axle, which supplies parts for many GM vehicles, halted work in late February. The AP reports that GM "has agreed to kick in up to $200 million to help settle the dispute," which would fund "temporary payments to supplement reduced wages," as well as "employee buyout and early retirement packages." GM has said that the offer is temporary and will be withdrawn if an agreement is not reached soon.
General Motors had been willing to ride out the strike for most of that ten weeks because American Axle primarily builds parts used in large trucks and SUVs, which very few Americans have been buying this year. According to the Detroit Free Press, "GM said the strike cost it $800,000 in the first quarter" of 2008 -- not a high price for America's largest automaker to pay. However, "within the past month, five GM UAW locals threatened to strike." Many of those worked at plants that made better-selling crossovers or midsize vehicles. Monday, workers walked off the job at a plant that built the popular Chevrolet Malibu, and "Analysts said dealers will run out of the popular sedan fast, with less than a 1-month supply of cars available for retail customers."
Reuters reports that the offer could "clear the way for GM to restart production of hot-selling models like the Chevrolet Malibu and Buick Enclave." A deal between the UAW and American Axle, it is believed, would still not provide union members with many of the concessions they sought. IRN, Inc. analyst Erich Merkle told Reuters that the UAW probably has to give up so much because striking at plants that make vehicles no one is buying doesn't hurt GM much. "The UAW didn't really have any leverage. The market's not really helping the UAW's position," Merkle said.
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