GM's stock dips 5%; strike costs cited

5/24/2008

DETROIT - General Motors Corp.'s stock dropped almost 5 percent yesterday after the company reported that strikes at some of its own plants and the parts supplier American Axle & Manufacturing Holdings Inc. will cost the automaker about $2 billion before taxes in the second quarter.

GM expects to produce 230,000 fewer vehicles during the quarter because of the nearly three-month-long strike at American Axle. It crippled GM's production of large sport utility vehicles and pickups.

The other strikes will cost the company 33,000 vehicles.

"We anticipate only a portion of this lost production will be recovered, due to the current economic environment in the United States and to the market shift away from the types of vehicles that were impacted by the action at American Axle," GM said in a filing with the U.S. Securities and Exchange Commission.

General Motors' shares fell 83 cents to close at $17.60, after touching $17.38 earlier in the session, their lowest level in nearly 26 years.

The last time GM traded below $17.46 was Oct. 6, 1982.

GM said the American Axle strike was expected to have the biggest effect by far, costing it $1.8 billion in the second quarter before taxes.

GM previously has said it lost $800 million during its first quarter and produced 100,000 fewer vehicles in that period because of the American Axle strike.