(Undercover Brother and His Cadillac in Detroit's better days)
DETROIT - If the United Auto Workers strike against General Motors Corp. lasts longer than a week or two, it could cost GM billions of dollars and stop the momentum the company was building with some of its new models, according to several industry analysts. Which means Black folks in Detroit are going to have a rough winter. Because things in Motown are already tight.
A strike of two weeks or less would not hurt GM's cash position and would actually improve its inventory situation, Lehman Brothers analyst Brian Johnson said Monday in a note to investors. But a longer strike would be harmful, causing GM to burn up $8.1 billion in the first month and $7.2 billion in the second month, assuming the company can't produce vehicles in Mexico or Canada, Johnson wrote.
Initially, the strike wouldn't have much impact on consumers because GM has so much inventory, the analysts say. The company had just under 950,000 vehicles in stock at the end of August, about 35,000 less than at the same time last year. But Tom Libby, senior director of industry analysis for J.D. Power and Associates, said even a short strike could hurt GM because its new crossover vehicles — the Buick Enclave, GMC Acadia and Saturn Outlook — are selling well and in short supply. "The momentum they've established for those products would be interrupted if there's a supply interruption," Libby said.
GM had about a 65-day supply of cars and trucks as September began, versus a 71-day supply at the same time last year, said Paul Taylor, chief economist for the National Automobile Dealers Association. The Enclave, he said, is at a tight 24-day supply. It was unclear what would happen to vehicles that were en route to dealers. The Teamsters transportation union said its 10,000 automotive transport members would not cross UAW picket lines.
The strike will cost GM about 12,200 vehicles per day, according to the auto forecasting firm CSM Worldwide of Northville. If the walkout goes beyond 36 hours, CSM expects vehicle production in Canada to be affected because of a lack of U.S.-built engines and transmissions.
The strike began at 11 a.m. EDT Monday when 73,000 UAW members at about 80 GM facilities in the U.S. walked off their jobs. Talks resumed a short time later as sign-carrying picketers marched outside plant gates, but weary bargainers stopped to rest around 8 p.m. Negotiators were to return Tuesday morning for their 22nd straight day of bargaining. Union President Ron Gettelfinger said the company wouldn't budge on guarantees.
Nod to Tom Krisher for his help on this one.
DETROIT - If the United Auto Workers strike against General Motors Corp. lasts longer than a week or two, it could cost GM billions of dollars and stop the momentum the company was building with some of its new models, according to several industry analysts. Which means Black folks in Detroit are going to have a rough winter. Because things in Motown are already tight.
A strike of two weeks or less would not hurt GM's cash position and would actually improve its inventory situation, Lehman Brothers analyst Brian Johnson said Monday in a note to investors. But a longer strike would be harmful, causing GM to burn up $8.1 billion in the first month and $7.2 billion in the second month, assuming the company can't produce vehicles in Mexico or Canada, Johnson wrote.
Initially, the strike wouldn't have much impact on consumers because GM has so much inventory, the analysts say. The company had just under 950,000 vehicles in stock at the end of August, about 35,000 less than at the same time last year. But Tom Libby, senior director of industry analysis for J.D. Power and Associates, said even a short strike could hurt GM because its new crossover vehicles — the Buick Enclave, GMC Acadia and Saturn Outlook — are selling well and in short supply. "The momentum they've established for those products would be interrupted if there's a supply interruption," Libby said.
GM had about a 65-day supply of cars and trucks as September began, versus a 71-day supply at the same time last year, said Paul Taylor, chief economist for the National Automobile Dealers Association. The Enclave, he said, is at a tight 24-day supply. It was unclear what would happen to vehicles that were en route to dealers. The Teamsters transportation union said its 10,000 automotive transport members would not cross UAW picket lines.
The strike will cost GM about 12,200 vehicles per day, according to the auto forecasting firm CSM Worldwide of Northville. If the walkout goes beyond 36 hours, CSM expects vehicle production in Canada to be affected because of a lack of U.S.-built engines and transmissions.
The strike began at 11 a.m. EDT Monday when 73,000 UAW members at about 80 GM facilities in the U.S. walked off their jobs. Talks resumed a short time later as sign-carrying picketers marched outside plant gates, but weary bargainers stopped to rest around 8 p.m. Negotiators were to return Tuesday morning for their 22nd straight day of bargaining. Union President Ron Gettelfinger said the company wouldn't budge on guarantees.
Nod to Tom Krisher for his help on this one.