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Published: Friday, 2/29/2008

GM shuts down 3 more plants as American Axle strike impact widens

DETROIT A strike at an auto parts supplier has forced General Motors Corp. to shut down three more pickup truck factories, idling 12,000 workers, the company said Friday.

Plants in Flint; Fort Wayne, Ind.; and Oshawa, Ontario, were to close at the end of the second shift on Friday night, GM spokesman Tom Wickham said.

The closures are in addition to the idling of a pickup truck factory in Pontiac on Thursday. All the plants make the Chevrolet Silverado and GMC Sierra full-sized pickups.

It is all due to a strike against parts supplier American Axle and Manufacturing Holdings Inc. The Detroit-based company makes axles and other parts for the trucks, and GM is running out of the parts, Wickham said.

Laid-off hourly workers will get most of their pay from the company under its contract with the United Auto Workers union.

Wickham would not say if the strike could lead to more GM plant closures, but industry analysts have said American Axle also makes components for GM's large sport utility vehicles.

"We are monitoring supply to other facilities," Wickham said.

Factories in Janesville, Wis., and Arlington, Texas, that make the large SUVs still were operating on Friday. Their vehicles include the Chevrolet Tahoe and Suburban, GMC Yukon and Cadillac Escalade.

GM also still was making pickups and large SUVs at a factory in Silao, Mexico, and it makes a small number of pickups at a plant in Toluca, Mexico.

About 3,600 workers represented by the UAW at five American Axle plants in Michigan and New York went on strike early Tuesday in a contract dispute. The strike continued Friday with no talks scheduled and each side saying it awaits a call from the other to return to the bargaining table.

American Axle had been using stockpiled parts to keep supplying GM and its other customers, although it appears those supplies are running out. The company makes axles, drive shafts and stabilizer bars.

GM accounts for about 80 percent of American Axle's business, with 10 percent going to Chrysler LLC and the rest to other automakers.

Unless the strike is lengthy, GM is unlikely to be hurt by the parts shortage because the company has an ample supply of pickups and large SUVs, analysts have said.

GM has more than a 150-day supply of pickups and more than 100 days worth of the SUVs, said Erich Merkle, vice president of auto industry forecasting for the consulting firm IRN Inc. in Grand Rapids.

After four or five weeks, other GM parts suppliers could also be forced to close plants, Merkle said. Some of the suppliers are in poor financial condition and would have trouble withstanding a shutdown, he said.

GM was not the only automaker affected by labor problems at a parts supplier. Chrysler LLC was forced to temporarily close its Windsor, Ontario, minivan plant on Thursday due to a Canadian Auto Workers strike at a TRW Automotive parts plant.

The TRW plant makes brake and suspension systems, mostly for the Chrysler facility. Negotiations are continuing.

GM shares fell $1.12, or 4.6 percent, to $23.38 in afternoon trading Friday.

Read more in later editions of The Blade and toledoblade.com



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