Gm Strike Threatens Launch Plans Prolonged Walkout Could Delay Introduction Of New Vehicles

A weeklong strike against General Motors in Canada would threaten the automakers’ hopes for a smooth, successful launch of several redesigned vehicles this fall.

The Canadian Auto Workers struck GM’s Canadian unit late Wednesday, walking out of three plants in Oshawa, Ontario, and one in St. Therese, Quebec. The union plans to spread the strike to other Canadian plants on Sunday and again on Wednesday.

CAW President Buzz Hargrove in Toronto said he met with GM negotiators for a few hours Thursday, but that there was no progress.

The world’s largest automaker has a big stake in a successful launch of its new minivans and midsize and compact cars this fall, and can ill-afford any delays, said Wes Brown, an industry analyst with CMS Forecasting in Farmington Hills.

The new autos are seen as critical to lift the company’s moribund line, which has seen recent lackluster sales compared to double-digit percentage gains for Chrysler.

“You can afford to have some of your other car plants affected by the strike, but when you’re trying to launch brand-new vehicles, you don’t want that to happen,” Brown said.

Analysts say GM has prepared for a strike by boosting production and stockpiling some parts made at its Canadian plants. It has a healthy supply of vehicles that initially will be affected by the strike.

Analysts say that if the strike does last to the point that GM’s North American production is shut down, it will cost the company about $50 million a day in lost production.

“Bottom line is, if it lasts long enough - more than a couple weeks - it starts getting very expensive,” said Nicholas Lobaccaro of Bear, Stearns & Co. in New York.

The strike would have to last several weeks before consumers would begin to notice shortages of some vehicles.

Oshawa’s truck plant produces about 35 percent of Chevrolet’s popular C/K full-size pickups, and most of the popular extended-cab versions. But Chevy has a 64-day supply of the trucks, according to Ward’s Automotive Reports.

Supplies of the Chevrolet Lumina and Monte Carlo, also built at Oshawa, are in the low 80s. There is more than 100 days’ stock of the Pontiac Firebird and Chevrolet Camaro sports cars built at St. Therese.