DETROIT _ General Motors has halted production of its important 2020 pickups built in Mexico due to the UAW strike in the United States.
The automaker Tuesday said it idled a plant in Mexico due to a shortage of parts normally made by striking U.S. workers.
The plant, GM's Silao Assembly, builds GM's highly profitable Chevrolet Silverado and GMC Sierra pickups. About 6,000 workers were affected. GM said some are taking vacation and those who don't have remaining vacation will get a portion of their pay while production is disrupted.
"Production at GM's Silao assembly and transmission plants has been disrupted as a result of part shortages related to the UAW strike," said Dan Flores, GM spokesman.
He said production at GM's other Mexican plants, Ramos Arizpe, San Luis Potosi and Toluca, continues on normal schedules. GM builds the new Chevrolet Blazer and Chevrolet Equinox SUVs at Ramos Arizpe. At San Luis Potosi, GM builds the Equinox, Chevrolet Trax and GMC Terrain SUVs. Toluca is a propulsion system and foundry operation.
A UAW striker reacted to the news saying, "There's nothing wrong with shutting down all their production everywhere until the strike is over with."
Another said the news of GM idling its plant in Mexico didn't surprise him.
"Eventually if this lasted long enough, the ripple effect was going to affect their operations in other countries," said Tim O'Hara, president of Local 1112 for GM's Lordstown Assembly plant, which the company shut down in March when production of the Chevrolet Cruze ceased.
During the second quarter, GM sold 142,464 Silverado pickups and 56,857 Sierras. U.S. production shut down Sept. 16, when 46,000 UAW members went on strike against GM.
The news is grim for GM with total North American production losses estimated to total 115,000 vehicles through today as Silao goes offline, Joe Langley, associate director, light vehicle production forecast, North America, at IHS Markit.
"Silao represents the second largest GM plant in terms of daily output behind the Fort Wayne plant that also produces the Silverado and Sierra," said Langley. "With no clear signs of a deal, production losses are expected total 153,000 units at the end of the week as the strike lingers and bites into GM's highly profitable full-size trucks."
At the beginning of the strike, analysts said GM had a 78-day supply of vehicles. Silao had been building the pickups until Tuesday so that added inventory is in transit to dealers.
"We won't update inventory until we release our sales tomorrow," GM spokesman Jim Cain said Tuesday afternoon. But he added, "Everyone gets hurt in the strike."
"Losing production of the Chevrolet Silverado and GMC Sierra will hurt," said Michelle Krebs, director of automotive relations at AutoTrader.com. "It will hurt sales at a time of the year that is particularly strong for truck sales _ and will put Silverado further behind Ram. And it will hurt profitability, since the bulk of GM's profits come from pickups."
It will increase pressure on the automaker to get a tentative agreement, said another labor expert.
"Up until now they've been able to add to their inventory even from the Canada and Mexico build. So hitting the Silverado and Sierra in Mexico � that's hitting revenue now," said Kristin Dziczek, vice president of industry, labor & economics at the Center for Automotive Research.
The UAW strike against GM is now in its 16th day. Reports say the total number of layoffs for non-UAW represented employees in North America with GM, including those in Mexico, are about 10,000.
Negotiators have worked every day, typically into the evening, since the strike started, but remain apart on key issues involving wages, health care and temporary workers.
GM's supplier companies and the U.S. economy are being hit too. The strikers and workers laid off at GM's supplier network had lost wages totaling $266 million through last Thursday, the Anderson Economic Group in Lansing estimated. The analysis estimated GM's daily loss at $25 million a day in profit.
