GM strike not expected to drag on
DETROIT -- Unlike the 1970 United Auto Workers' strike against General Motors, which went on for 69 days and helped push the nation into a recession, industry watchers predicted Tuesday the current strike will be a short one.
Both sides have something the other desires -- the workers want job security, GM wants to make retiree health care a union burden -- and that is the stuff agreements are made of.
"The UAW and GM understand that a strike is a lose/lose proposition," Deutsche Bank analyst Rod Lache said Tuesday to investors.
The two sides were back at the bargaining table Tuesday as workers walked the picket lines for a second day. Talks restarted Tuesday morning after bargainers ended a marathon, 36-hour session Monday evening, GM spokesman Dan Flores said. Analysts were encouraged the talks have continued throughout the strike.
GM's 73,000 UAW-represented employees walked off their jobs Monday after the union said GM failed to make promises for future products and investment in U.S. plants. GM said it would work with the UAW to address competitive challenges.
In 1970, the UAW's strike against GM rippled through the economy. Production declined, unemployment rose and retail auto sales dried up, according to an analysis by Merrill Lynch. A 54-day strike against two GM plants in 1998 wreaked similar havoc and cost GM $2.2 billion.
This strike is having an impact. On Tuesday, 3,000 workers were idled at GM's largest Canadian assembly plant in Oshawa, Ontario, and GM was considering closing down a second Canadian plant. Auto supplier Delphi said it was temporarily laying off workers but declined to say how many because the situation was in flux.
Still, industry watchers predict the strike's impact will be minimal. Goldman Sachs auto analyst Robert Barry said if UAW had planned a long strike, it would have struck one or two key plants instead of about 80. The union is paying striking workers $200 a week from its $800 million strike fund.
"In our view, the action is designed to allow UAW leaders to look vigilant in fighting to preserve benefits, members to feel concessions are not being given gratuitously, and GM management to appear to be maximizing shareholder value," Barry said in a note to investors.