UAW Goes On Strike

The United Auto Workers have gone on strike against GM, and as you might expect, this isn't good news for the the US carmaker. From the AP:

"A strike of two weeks or less would not hurt GM's cash position and would actually improve its inventory situation, Lehman Brothers analyst Brian Johnson said Monday in a note to investors. But a longer strike would be harmful, causing GM to burn up $8.1 billion in the first month and $7.2 billion in the second month, assuming the company can't produce vehicles in Mexico or Canada, Johnson wrote."

The workers are demanding that GM guarantee that US plants (ie, unionized plants) will continue to receieve new car orders. Another quote:

""Job security is one of our primary concerns," Gettelfinger told reporters Monday after talks broke off and the strike began. "We're talking about investment and we're talking about job creation" and preserving benefits, he said."

If this strike continues and GM fails to meet demand, US consumers might find themselves squeezed out of the market. The decreasing value of the dollar will ultimately drive up the cost of imported cars, and labor disputes could prevent domestic makers from filling the gaps left in the market.