DETROIT (Reuters) - More than 73,000 General Motors Corp workers walked off the job on Monday after marathon contract talks between the United Auto Workers union and GM stalled and the union called the first national strike since 1970 against the top U.S. automaker.þþThe strike marked an unexpected twist to the 10-week round of contract talks seen as crucial to GM's survival as it restructures its loss-making U.S. operations and seeks to cut itself free from a health care obligation of over $50 billion.þþAnalysts said the automaker could ride out a short work stoppage with many predicting the two sides would still settle on a deal on wages and benefits that delivers many of the sweeping concessions GM has sought.þþBut the economic and political impact from the UAW-ordered shutdown of over 80 GM facilities across the United States was immediate.þþThe White House urged both sides to stay at the bargaining table. The Teamsters union said it would honor the strike by not hauling GM vehicles for the duration of the walkout.þþBy Monday afternoon, the strike had already cost GM roughly 4,000 vehicles in lost production, according an estimate by CSM Worldwide, auto industry tracking company.þþA protracted strike could force GM to burn through $8 billion a month, Lehman Brothers analyst Brian Johnson said.þþUAW President Ron Gettelfinger, regarded as a pragmatist willing to break with the union's past practices, said GM had pushed the union into striking by not showing a willingness to meet it halfway on crucial issues such as job security.þþÿYou can be pushed off a cliff and that's what happened here,ÿ Gettelfinger said, speaking to reporters at a news conference at the union's Detroit headquarters.þþThe UAW and GM resumed negotiations on Monday afternoon, marking 21 days of unbroken contract talks between the two sides.þþGM said it was ÿdisappointedÿ in the UAW's decision to strike and wanted to reach a deal.þþÿThe bargaining involves complex, difficult issues that affect the job security of our U.S. work force and the long-term viability of the company,ÿ GM said in a statement. þþWHO BLINKS FIRST?þþGM stock, which had traded sharply higher before the UAW strike, closed down 20 cents to $34.74 on the New York Stock Exchange on Monday. The shares have traded in a 52-week range of $38.66 to $28.49.þþMany analysts said both GM and its major union had been weakened by the U.S. auto industry's long-running decline -- making it doubtful either side has the stomach for a protracted strike.þþÿThis could be a short-term impasse, or it could go on for a really long time and really be a serious blow, particularly to the union,ÿ said David Cole, chairman for the Ann Arbor, Michigan-based Center for Automotive Research.þþGM, Ford and Chrysler are seeking concessions from the UAW to close a labor cost gap with Toyota Motor Corp <7203.T> and other Japanese automakers operating in the United States they say amounts to more than $30 per hour for the average worker.þþUnless GM gets substantial concessions from the UAW, it could be forced to shut more of its U.S. plants and accelerate a restructuring that has already cut 34,000 UAW workers from its payroll in the past year, Cole said.þþÿIf there is no contract, there is no obligation. It's an extremely dangerous gamble,ÿ he said.þþKeyBanc Capital Markets analyst Brett Hoselton said a short strike and the accompanying lost wages could soften up the UAW rank and file ÿto accept more concessions, not fewer.ÿþþNegotiations between GM and the UAW included a GM proposal to cut its health-care costs by establishing a trust fund for retiree-related costs.þþUnder that plan, GM would shift responsibility for retiree health care to a new UAW-aligned trust fund known as a voluntary employee beneficiary association, or VEBA. Wall Street analysts have said establishing a VEBA could cut GM's annual costs by $3 billion in exchange for a one-off payment expected to top $30 billion.þþGettelfinger said the UAW was ÿmore than willingÿ to reach a VEBA deal with GM. The problem, he said, was that GM had not closed the gap with the union on other issues such as wages, benefits and profit-sharing.þþÿWe are ready to go in and wrap up these negotiations,ÿ he told reporters, adding that the union would not call off its strike until it had a labor deal.þþExpectations for a cost-cutting labor deal drove GM shares up almost 14 percent this month before Monday's trading.þþThe outcome of this round of talks is seen as crucial to efforts by the three Detroit-based automakers -- GM, Ford Motor Co and Chrysler LLC -- to recover from combined losses of $15 billion last year and sales difficulties that have driven their share of the U.S. market below 50 percent.þþBy Monday afternoon, workers at GM factories across the United States were picketing with signs reading ÿUAW on Strikeÿ and ÿHands Off My Pension.ÿþþA majority of GM's 73,000 UAW-represented workers would have to ratify any deal.þþThe last UAW strike against GM was in 1998. That walkout at two GM parts plants in Flint, Michigan, shut down GM production and caused sales to plummet.þþThe UAW has not called a national strike during contract negotiations since 1976. The last national strike against GM was in 1970 when the union won a pension guarantee for workers with 30 years of seniority.þþ
Source: NY Times
