UAW Walkout Could Cost GM $50 Million Per Day

The United Auto Workers union strike that began on Monday against the U.S. facilities of General Motors Co. could cost the carmaker $50 million per day in pretax losses, says Credit Suisse.

The two sides, which are continuing negotiations this week, appear to be far apart on key issues. The UAW aims to secure a new four-year labor agreement covering 48,000 United Auto Workers union members at GM that includes pay hikes, better job security, richer terms for entry-level workers and continued low-cost healthcare.

Analysts says a short strike will have little impact on GM. But they say a protracted walkout would erode GM’s cash supply and eventually impact the economies of Michigan and the U.S.

Fitch Ratings says a lengthy strike could add a few billion dollars to GM’s cash burn. Moody’s Investors Service says GM’s goal in the labor talks must be a settlement that gives it enough flexibility to deal with softening sales, lower labor costs enjoyed by overseas producers and the labor-trimming result of shifting more production to simpler electric vehicles.

UAW members grumble that GM hasn’t addressed the union’s demands to restore cuts accepted by workers a decade ago to help GM recover from its bankruptcy. The union also wants to raise pay for entry-level hourly workers and shorten the time it takes for them to reach top pay rates.