Autos

GM furloughs 1,200 additional US and Canadian workers as UAW strike enters second week

Key Points
  • More than 1,200 additional workers with GM in the U.S. and Canada are temporarily laid off as of Monday as the UAW strike drags into its second week.
  • The latest cuts include roughly 525 hourly employees in Ohio and about 700 people in Canada.
  • The UAW's strike against the automaker, now in its eighth day, temporarily displaces more than 3,700 of GM's nonunion employees.
United Auto Workers members picket outside a General Motors transmission plant on Sept. 18, 2019 in Warren, Mich.
Michael Wayland / CNBC

DETROIT — General Motors told more than 1,200 workers in the U.S. and Canada they were being temporarily laid off as of Monday due to the United Auto Workers' ongoing strike against the automaker.

The fresh round of cuts is on top of an estimated 4,500 temporary layoffs GM and its suppliers handed out to employees as of Friday, according to Jerry Dias, president of Canadian trade union Unifor, which represents GM and other auto workers in Canada.

The latest furloughs include roughly 525 hourly employees at the automaker's jointly operated DMax engine facility in Ohio and about 700 people at GM's St. Catharines, Ontario, powertrain plant, according to company and union officials. That brings the total number of workers temporarily out of jobs to 3,725 at GM and at least 2,000 employees at its suppliers. The total is likely significantly higher as there isn't a way to track all of GM's suppliers.

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GM furloughs another 1,200 workers as a result of the strike

GM said Monday it planned to resume operations at plants that have been hit by the strike "as quickly as possible" once they get a deal.

Julie A. Fream, president and CEO of auto parts trade group the Original Equipment Supplier Association, said last week the "vast majority of North American supplier plants shipping product to GM will need to adjust their production schedules" if the strike continues for a week or more. The group declined Monday to say how many suppliers have been impacted by the UAW strike so far.

Magna International, an Ontario company that supplies several components to GM, confirmed Monday that approximately half of its divisions in the U.S. and Canada have "started to experience sporadic layoffs."

Tracy Fuerst, a spokeswoman for Magna, declined to say how many workers have been temporarily laid off. The company employs about 170,000 people globally, according to its 2018 annual report. She said some divisions have been able to "offer training and/or conduct maintenance and inventory to help mitigate the downtime in the short term."

Magna, according to Fuerst, continues "to monitor the situation and we remain hopeful for a quick resolution." GM, according to Magna's annual report, was its largest customer in 2018, representing 15% of its sales.

Citigroup, in a note to investors last week, mentioned Magna as well as American Axle, Lear and Aptiv as being suppliers that would be most affected by the strike. Representatives for the other companies did not respond to numerous emails or phone calls.

Roughly 48,000 UAW members with GM have been on strike since Sept. 16 after the two sides failed to reach a deal by a Sept. 14 deadline. It is the union's first national strike against the automaker since a two-day work stoppage in 2007 and the longest national strike since the 1970s.

GM's use of temporary workers, potential closure of plants and health-care contributions have been among the major sticking points, according to people familiar with the talks.

The strike is estimated to cost GM up to $100 million a day in lost production, according to Wall Street analysts.

GM shares closed at 37.24, down slightly. The stock is down about 4% since closing at $38.86 on Sept. 13, the Friday before the strike began.