GM strike has cost the company $1 billion, says JP Morgan analyst

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The strike by auto workers has also led to a parts shortage, which forced the company to close plants in Mexico.

DETROIT — The 16-day strike by auto workers has cost General Motors GM, -3.66% about $1 billion according to at least one estimate, while a parts shortage forced the company to close pickup truck and transmission plants in Mexico.

On Tuesday it appeared that both sides were apart on an agreement that could end the strike by 49,000 workers, which has halted GM’s U.S. factories since Sept. 16. A top UAW negotiator wrote in a letter to local union leaders that a contract proposal from the company fell short of union demands. The Mexican 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.

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.

 

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