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GM temporarily laying off 1,300 workers in Canada amid UAW strike

CNBC logo CNBC 9/18/2019 Jasmine Kim

General Motors announced Wednesday that it plans to temporarily lay off 1,300 workers at its final assembly plant in Oshawa, Canada, amid a slowdown at U.S. plants during a Union Auto Workers strike.

GM Canada announced that it’s cutting its workforce because production of GM pickup trucks is being cut in half at the plant. The GM plants in the U.S. are currently shut down due to the strike and are unable to supply the necessary components needed for production.

The GM Oshawa plant in Ontario, Canada built the Chevy Silverado and GMC Sierra pickup trucks.

Roughly 48,000 United Auto Workers with the automaker went on strike on Monday. The union and the automaker were not able to reach a deal by a Saturday night deadline, so UAW leaders called for the first national strike against GM since 2007.

Negotiations between GM and the union resumed on Tuesday morning, but they have not been able to reach an agreement yet.

Wall Street analysts estimated that GM is losing up to $100 million a day in lost U.S. production due to the strike.

The automaker’s decision to layoff workers in Canada shows that the strike is spreading to other units of the automaker’s business. If that continues and it impacts the automaker’s supply base, companies and workers outside GM could soon be impacted by the strike and laid off as well.

GM’s suppliers haven’t been impacted by the strike yet, but that could change, especially the longer it drags on, Citigroup analysts said in a research note to investors. Its suppliers with the biggest exposure include American Axle, Magna, Lear and Aptiv, according to Citigroup.

CNBC’s Phil LeBeau and Michael Wayland contributed to this report.

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