Define huge. And can we have a time frame please? According to CNNMoney, "JP Morgan analyst Eric Selle estimates GM will spend $1.8 billion if the strike lasts a month, based largely on hourly wage costs, according to a research report earlier this month." So that's besides the damage inflicted by the drying-up of dealer orders (GM books vehicles as sold when they leave the factory). Meanwhile, the United Workers (UAW) and American Axle (AA) are both toughening their positions. According to Automotive News [sub], the parts maker is threatening to further downsize its U.S. operations– two New York plants are due to close– if its UAW workers don't take a wage and benefit cut. UAW Prez Big Ron Gettelfinger went on radio to give AA a tongue lashing for dictating rather than negotiating terms. So far, the strike has idled 29 GM factories. For their part, GM spokeswoman Renee Rashid-Merem said the company "isn't commenting on the potential financial impact or on any analyst estimates." You know, other than Wagoner's assessment that it's no biggie.

The Windsor Star reports that fire fighters have extinguished a blaze at Chrysler's Windsor, Ontario plant (Chrysler minivans). The fire appears to have started the plant's paint shop, also the source of a recent fire at Porsche's Zuffenhausen factory. The fire was noticed at about 12:30 local time, as smoke and flames rose from the roof of the factory. According to CAW officials on site, was evacuated without any injuries to workers. "The evacuation system worked," said CAW Local 444 President Ken Lewenza. "Everybody's out of the workplace. We're now in the process of getting the plant operating." Officials estimate that the plant will return to normal production by later today. We've received no confirmation of rumored sightings of Cerberus executives with gas cans and copies of insurance contracts in the area.

Ford has spent considerable amounts of money trying to make its North American workforce more cost-effective. Last year's contract with the United Auto Workers (UAW) allowed Ford to hire new workers at lower pay rates, while trimming higher-paid labor through buyouts and early retirements. But when the 54k buyout offers translate into actual gains in efficiency is "anyone's guess." That's the straight dope from VP for Labor Affairs Marty Mulloy [via Wards]. Ford's cost savings are directly related to the number of employees actually taking the buyout offer ('natch), and Ford still isn't saying how many workers are expected to sign up and bail out. Meanwhile, Mulloy says the American automaker will not be making any new entry-level hires this year. That's because five thousand highly-paid Ford workers still languish at the 11 factories once owned by Automotive Components Holdings (ACH), which Ford (in its infinite wisdom) bought in 2005. While Ford wants to sell or shutter the plants by year's end, it has to either hire or buy-off the ACH employees. Folks, it could be years before the Blue Oval's labor costs approach those of Toyota, Honda and other transplant competitors. And Ford's talking about insourcing?

For some reason, The New York Times op ed department reckons Mayor Bloomberg's campaign to reduce the number of New York City's free parking passes will help his/their campaign for an $8 per day congestion charge. Huh? First, that's a whole lot of people paying bupkis to bring their car into Manhattan (there may also be tens of thousands of counterfeit passes). People who wouldn't be happy paying $8 a day to the city government for the privilege of doing something they're doing day in, day out on the City's dime. Second, they're all government workers. Let me translate: union employees. No single group can kibosh a new government initiative faster than a public workers' union. If you think about it, the best way for Bloomberg to build support for the congestion charge would be to hand out MORE free parking passes. Oh, and to cut down on fraud, Bloomberg's created a new, centralized parking pass authority within the Police Department's Internal Affairs Bureau. Fair enough? Uh, well, that department currently accounts for 58k free parking passes.

The United Auto Workers (UAW) strike has already has idled six GM assembly plants. A seventh factory ceases work today: the Wentzville, Missouri plant where The General builds full-sized vans. The Detroit Free Press reports that the UAW will soon stop production at the Janesville, Wisconsin plant, halting production of Tahoes and Yukons. Barring resolution of the union's industrial action by Monday, GM will shut down the Romulus (MI) Engine, Saganaw (MI) Metal Casting, Moraine (OH) engine plant and its Toledo (OH) Transmission plant. Again, even if the UAW settles at American Axle, the downtime will cost GM tens of millions of dollars, and threatens to drive secondary suppliers to the wall. Meanwhile, GM CEO Rick Wagoner received a 33 percent raise to $2.2m p.a.

As the American Axle (AA) strike stretches into its second week, Automotive News [sub] reports that GM may be considering bailing out yet another troubled supplier. Thus far, GM has claimed the Axle-caused work stoppages gave them an opportunity to trim bloated truck and SUV inventories. But as the strike begins to halt all of GM's high profit North American truck production, and hobbles hundreds of other suppliers, this shit is getting serious. Negotiations between the United Auto Workers (UAW) and American Axle management are deadlocked. American Axle wants to cut UAW wages in half across the board, from $28/hr to $14/hr. The only viable scenario at this point: the now-standard package of buyouts, buydowns and flowbacks. Once GM has finished buying out enough of its own workers, it could move the holdout American Axle workers to its own payroll, freeing AA management to hire new employees at the now-competitive rate of $14/hr. But isn't the point of GM's buyout program to trim its payroll fat? And hasn't GM already blown its bailout budget on Delphi? Chapter 11 if they do, Chapter 11 quicker if they don't.

The Toronto Star reports that GM Canada is boosting Impala production by some 46 units per day, to about 1100. The General says it made the decision to put the pedal to the medal (i.e. adding overtime shifts) at the award-winning Oshawa plant to meet growing demand for the wrong-wheel-drive beast south of the 49th. Despite the decision to kibosh a rear wheel-drive version of the car, or maybe because of it, the Impala's American sales are up 7.3 percent from last year. Some Chevy dealers report that the "old," bigger Impala is stealing sales from the new, narrower Malibu. Either that or fleet clients have boosted their orders knowing that the Impala is slated for execution. (Automotive News [sub]: "General Motors, Ford Motor Co. and Chrysler LLC accounted for fewer than three out of four new vehicles sold to the U.S. rental industry last year — down from more than four-fifths in 2006.) Or maybe it's got something to do with the possibility of a Canadian Auto Workers strike. Your thoughts?

Reuters reports that the strike at American Axle is forcing General Motors to idle production at two more plants: Moraine, Ohio (Chevrolet Trailblazer and GMC Envoy) and the AMC General plant in Mishawaka, Indiana (Hummer H2). This brings the total number of off-line production facilities to six, including the four factories that produce the GMC Sierra and Chevrolet Silverado pickup trucks. Job-wise, "13,700 GM workers, or almost 20 percent of its blue-collar work force, could be laid off this week." Next in the firing line: Yukatahoeburbelade production in Arlington, Texas and Janesville, Wisconsin. GM is down-playing the strike's effects on its bottom line. Marketing maven Mark LaNeve painted the problem as a convenient way to keep inventories low– in the face of February's 20 percent decline in truck sales. But GM [still] depends on the big rigs for the lion's share of its profits. If the strike stretches on, if truck inventories sink below severely diminished demand, the drain on GM's cash flow will be nothing short of catastrophic.

With the UAW less than a week into its strike at American Axle (AA), International Business Times reports parts shortages are set to idle a fifth GM truck plant sometime this evening. The Moraine, Ohio plant which manufactures Chevy Trailblazers and GMC Envoys will not be closing its doors; management told workers to report to their normal shifts for training. Striking union leaders at AA's Three Rivers, Michigan plant reported over the weekend that they are "ready for serious bargaining at any time." GM is unlikely to lean on either AA or the UAW for a quick resolution, considering their huge overstocks on nearly all of the truck-based models made using American Axle parts. J.D. Power notes that Envoys sat on dealer lots for an average of 59 days before sale in the December-February period, while Trailblazers languished an embarrassing 75 days. Without real leverage, the onus is on the United Auto Workers to explain to its 3,600 striking AA employees why it's worth disrupting production at plants which collectively employ over 12k union brothers and sisters.

Three GM truck plants will shut down around midnight tonight because of the strike at American Axle. Automotive News [AN; sub] reports about 9,500 workers at the Fort Wayne, Flint and Oshawa plants will be idled, in addition to the 2,500 workers who went home from the Pontiac assembly plant earlier this week. GM wouldn't comment on whether or when the pickup plant in Silao, Mexico would shut down. They project the plant at Arlington, Texas will continue production until mid-March. Arlington builds Suburbans, Tahoes, Yukons and Escalades; the other plants build Silverados and Sierras. With inventories well in excess of a 100-day supply for all these models, GM isn't sweating it. Yet.

Some 175 member of the Canadian Auto Workers (CAW) union employed by the TRW auto supply plant in east Windsor (Ontario) downed tools at three am last night and walked off the job, protesting wages and benefits. The Detroit News reports that Chrysler's Windsor minivan plant– which depends on TRW for its minivans' suspension frames– shut down three hours later. "Talks have broken off," announced CAW Local 444 President Ken Lewenza. "We're digging in our heels for a long one." CAW bargaining rep Mike Renaud told The Windsor Star he's got no regrets. ""It's a major blow to our community, and we're fully cognizant of that. And we remain willing to bargain at any given moment. But we have to have fair wages and benefits here for people," he said. Renaud described the average TRW $11.25 per hour salary as a "poverty level wage." CAW member Ryan Kelly, who works in shipping, said amen to that. "I made more working at Tim Horton's — it's a joke." Surprisingly (or not), this is the first time the TRW workers have attempted to reach a collective agreement with management. But not the first– nor the last– time Chrysler has been whacked by supplier disruptions. 

UPDATE: Chrysler currently maintains an inventory of 45,700 minivan: a 57-day supply of Chrysler Town & Countrys and a 77-day supply of Dodge Caravans. 

The United Auto Workers (UAW) strike at American Axle is starting to take its toll. According to the Detroit Free Press, the axle shortage has caused GM to halt production at the end of the first shift at Pontiac Truck and Bus plant. The Pontiac plant makes Chevy Silverados and GMC Sierras; thanks to a healthy inventory (153-day supply of Silverados and 152-day supply of Sierras) and continued production through the month, there's plenty of product on dealer lots to see them through the next few weeks. However, as the strike shuts down other plants, other suppliers will start to shut down or cut back production to match the diminished demand. Although GM accounts for 80 percent of American Axle's business, they also supply axles for Dodge Ram pickups (122-day supply). No word on how the strike will affect Dodge's assembly plants. But the question of the day (for now) is this: with 25 percent of Detroit's large suppliers in or teetering on the brink of bankruptcy, will one (or more) of them kill the golden geese?

In spite of the way the United Auto Workers (UAW) rolled over and played dead compromised with The Big 2.8 during last year's contract talks, it isn't all sunshine and rainbows between labor and management in the auto industry. CNN Money reports that this morning, negotiations between the UAW and American Axle broke down over "major issues." American Axle produces parts for GM's full-size pickups and SUVs, so there hasn't been an overwhelming demand for their product over the past few years. Hence the parts maker's claim that their $70/hour labor costs are unsustainable. American Axle wants to cut their UAW wages to $27 to $35/hour– bringing them in line with other axle producers. Meanwhile, GM's plant in Oshawa, Ontario has about a three-day supply of axles on hand and American Axle has about a two-week supply stockpiled. So the strike won't have an immediate impact on GM's plants. However, as we've seen before, if they don't resolve the problem at this supplier STAT, it'll have a ripple effect at the truck plant that will resonate back down the supply pipelines to other suppliers.

It's a piercing glimpse into the obvious in a New York Times article without any major revelations, but it's still worth noting the human toll of Ford's shrinking market share and concomitant race to slice its labor costs. As former Detroit News writer Bill Vlasic correctly points out, "Ford’s big new push is not to sell cars. Instead, it is trying to sign up thousands of workers to take buyouts, partly by convincing them that their brightest future lies outside the company that long offered middle-class wages for blue-collar jobs." To that end, the Times embeds a happy-clappy video “Connecting With Your Future" that shows Ford's please-leave-now ex-employees that yes, Virginia, there is life after Ford. Ah, but is there life for Ford? In the middle of Vlasic's sugar coated pill run down, a quote from analyst John Casesa is like a shot to the solar plexus. "These companies are trying to do in the last 24 months what they should have done over the last 24 years,” the head of Casesa Shapiro Group says. “That’s why it’s such a shock to the system.” Just as sadly, it's come to this: "One thing Ford workers are proud of is that their buyout options are more extensive and, in some instances, better paying than those at G.M." 

Barak Obama visited a GM plant in Wisconsin. Hillary Clinton visited a GM plant in Maryland. John McCain visited a Ford plant in Michigan. But who loves ya, Chrysler? Apparently nobody. The candidates have studiously ignored MoPar's plants. With Mike Huckabee barely hanging in there, maybe he should target them (you know, birds of a feather and all that). But then that leaves the Toyota, Honda, Hyundai, Mitsubishi, Subaru, Nissan, BMW and Mercedes plants. They're full of American voters just like the UAW-owned plants. So why isn't anyone paying any attention to them? A word to the wise: if you're supposed to represent all the people, you need represent all the people. Just pandering to those voters represented by a union may get you some votes in the short run, but it'll be a bitch when all those grandiose promises you've made return to bite you in the ass. Just sayin'.