General Motors on Tuesday imposed 6,000 layoffs on its Mexico plant that is responsible for the manufacturing of its GMC Sierra 1500 and Chevrolet Silverado pickup autos. The announcement came amid increasing tensions with the United Auto Workers (AUW) union.
According to CNBC, the layoffs are temporary. The U.S. automaker also revealed that the administration had to make the decision due to a components shortage. The shortage has been attributed to the massive UAW strike against the company.
Industry experts noted that pickups are critical in the company's sales and profitability margins. With the idling of the Silao plant in Mexico, analysts forecasted that GM's production of pickups in the fourth quarter will largely decline.
A spokesperson for General Motors (GM) pointed out that the company is prioritizing its target of getting back "everybody" to work despite the continuous hard-line stance of UAW employees who spearheaded the strike.
To date, GM has shed around 10,000 workers, officials revealed, as there was another layoff last week and in the past weeks since the strike kicked off 16 days ago. Last week, the company confirmed that engine production activities were put on the idle mode in its Mexico factory.
The exact number of layoffs has yet to be revealed but industry experts said job cuts are already well over thousands. In Canada, there were already around 3,200 manufacturing workers who lost their jobs.
On the Ohio DMax engine plant, 525 hourly workers were cut from the workforce. The Silao, Mexico plant's latest layoffs are said to be just one of the succeeding struggles that GM will face until it reaches an agreement with striking UAW employees.
Labor Professor at the Worker Institute at Cornell University, Art Wheaton, predicted that General Motors will finally be pushed to the brink of reaching an amicable settlement with UAW once sales of its profitable pickup line collapse.
The strike is believed to have cost the automaker around $1 billion in losses, Business Insider reported. JPMorgan analyst Ryan Brinkman said the auto giant will most likely recover some of its losses if it moves to shift production from the third quarter to the final quarter of this year.
The union has been firm on its stand that a proposal submitted by General Motors did not satisfy the necessities in the worker contract. For its part in the negotiations, GM said it will keep the talks going until an agreement is reached for the benefit of the company and its employees.
Striking UAW employees have been trying to raise their concerns about pay, job security, profit sharing, and the company's policies for temporary workers. It remains to be seen how GM will handle the increasing costs.
