Stoppage could shut Canadian, Mexican plants

The strike at General Motors Corp will cause US production losses of 760 vehicles per hour and could shut the automaker's facilities in Canada and Mexico within three days, a leading industry analyst said.

Michael Robinet, an auto industry analyst with CSM Worldwide, said the called on Monday could have a cascading effect on GM production elsewhere.

Initially, the shutdown of GM's US plants will cost the automaker production of 12,200 vehicles per day, he said.

If the strike continues for more than 36 hours, that would hurt GM production in Canada and cut production of another 4,000 more vehicles per day, he said.

If the strike were to last more than 72 hours, it would begin to disrupt GM's supply chain and affect the automaker's production in Mexico, Robinet said. That would mean a total production loss of about 18,100 vehicles per day.

"It is our view that this walkout will not be protracted - past more than one week," Robinet said.

As GM's inventory currently totals more than 80 days of sales for key vehicles such as its full-size pickup trucks and sport-utility vehicles, the strike will not have much immediate impact on sales, Robinet said.

"It's not as though people are standing on their driveways waiting for these vehicles, but if it goes longer that could start to have an effect," he said.

Robinet said GM would feel any pinch from the strike first on new "crossover" vehicles such as its Buick Enclave and small cars such as the Chevrolet Cobalt and HHR where it has comparatively lower inventory.

Agencies

(China Daily 09/26/2007 page16)