GM lays off 6,000 workers in Mexico due to parts shortage

By David Shepardson and Joseph White

(Reuters) – The United Auto Workers union said on Tuesday it rejected a new comprehensive offer made by General Motors Co (N:) to end a two-week-old strike, saying it came up short on a number of fronts.

The union said it had made a new counterproposal and warned “there are still many important issues that remain unresolved.” Also on Tuesday, GM said the ongoing strike by U.S. workers forced it to halt production at its pickup and transmission plants in Silao, Mexico, resulting in temporary layoffs of 6,000 workers.

About 48,000 UAW members went on strike on Sept. 16 seeking higher pay, greater job security, a bigger share of the leading U.S. automaker’s profit and protection of their healthcare.

UAW Vice President Terry Dittes said in a letter to members the GM offer “came up short” on issues like healthcare, wages, temporary workers and job security, “to name a few.” GM is still seeking some concessions, the union added, saying it is committed “to exploring all options in order to reach an agreement.”

GM said in a statement it continues “to negotiate and exchange proposals, and remain committed to reaching an agreement that builds a stronger future for our employees and our company.”

Still, the statements that GM and the UAW are now exchanging “comprehensive proposals” indicate the talks have shifted into a higher gear as both the automaker and striking UAW workers feel an economic bite from the dispute.

The strike had previously forced GM to lay off at least 2,000 Canadian workers and temporarily close an engine plant in Mexico.

Many suppliers have been forced to halt or scale back some operations.

JP Morgan auto analyst Ryan Brinkman estimated in a research note on Tuesday that the strike has cost GM over $1 billion but it may be able to recover a portion of lost profit in the fourth quarter. He said GM has $82 million a day in lost profit.

GM in Mexico said that “for the moment” its three other Mexican plants – Ramos Arizpe, San Luis Potosi and Toluca – are working normally. A spokesman in Mexico said the plants still had parts available but that the company could not say how many more days the plants would remain open. The spokesman declined to estimate the daily cost of suspending operations at the Silao complex.

The 6,000 affected workers are being paid a percentage of their salary, the spokesman said, with some workers using vacation time to continue receiving their full salaries.

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