GM faces shutdown as strike takes grip

DAVID USBORNE

New York

A week-old union stoppage at two brake-making plants in Dayton, Ohio, has paralysed General Motors, threatening profits and sending damaging ripple effects through the whole American economy.

The company, which has not faced so serious a labour crisis since its last big strike in 1970, had already shut 21 of its 29 factories in North America yesterday morning and is close to suspending all operations in the US, Canada and Mexico.

The dispute in Dayton - more recently associated with the Bosnia peace- making conference - centres on plans by GM to begin buying in some brake units from an outside supplier, Bosch of Germany. A local branch of the United Auto Workers union is demanding that the company scrap the plan and agree instead to increase employment at Dayton.

As of yesterday morning, more than 80,000 car workers were laid off. Meanwhile, Wall Street analysts were warning of damaging consequences for the automotive parts industry and also for the steel manufacturers that supply General Motors.

Talks between the management and the union which only began on Tuesday night have so far offered little hope of a settlement. "There was no progress on substantive issues, but it was a hopeful sign for further talking," a GM spokesman said of the first negotiating round.

GM, the biggest of the world's car-makers, whose subsidiaries include Vauxhall, has returned to profit in recent years after a disastrous period in the late 1980s. The other two of America's "Big Three" manufacturers, Ford and Chrysler, have also been experiencing a resurgence in fortunes.

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