American Axle strike cost GM $2.82 billion

Posted Sun May 25 2008 7:42 AM by Viknesh Vijayenthiran

With recent news of workers crossing the picket line and the American Axle strike being called off, General Motors has taken stock of the strike action's effect on its business. In total, the strike cost the carmaker almost $2.82 billion but other costs have yet to rear their heads - such as lost customer loyalty due to long waiting periods for vehicles.

The breakdown of the total financial cost reveals that the General lost $1.8 billion in the second quarter alone, as well as $800 million from lost production in the first quarter, totaling $2.6 billion dollars. In addition to this, GM paid American Axle $215 million to finance employee downsizing and buyouts to bring the total to $2.815 billion, reports Automotive News.

During the strike as many as 30 assembly and parts plants were affected, and in total there was a 330,000 unit deficit in production. The loss suffered is heavy but may eventually be offset by the lower prices GM will have to pay for labor from American Axle. New deals are expected to cut a typical worker’s wages by $10 per hour, but offers buyouts of up to $140,000.

Reader Comments

Sun May 25 2008 4:27 PM
Minizzle says

wow that's a lot of money to loose when the car industry is already down
Mon May 26 2008 9:46 AM
chris says

its a lot of money to lose when its GM and they're already investing huge in the future as it is. it's like theyre just running on some kind of momentum right now, and any bit of money they get right now is just going to future products... really makes me think that if they can weather the current storm, toyota will have a lot to worry about.

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