UAW strikes GM as talks fail to produce a deal

By Kevin Krolicki and Poornima Gupta

DETROIT (Reuters) - More than 73,000 General Motors Corp workers walked off the job on Monday after marathon contract talks between the United Auto Workers union and GM stalled and the union called the first national strike since 1970 against the top U.S. automaker.

The strike marked an unexpected twist to the 10-week round of contract talks seen as crucial to GM's survival as it restructures its loss-making U.S. operations and seeks to cut itself free from a health care obligation of over $50 billion.

Analysts said the automaker could ride out a short work stoppage with many predicting the two sides would still settle on a deal on wages and benefits that delivers many of the sweeping concessions GM has sought.

But the economic and political impact from the UAW-ordered shutdown of over 80 GM facilities across the United States was immediate.

The White House urged both sides to stay at the bargaining table. The Teamsters union said it would honor the strike by not hauling GM vehicles for the duration of the walkout.

By Monday afternoon, the strike had already cost GM roughly 4,000 vehicles in lost production, according an estimate by CSM Worldwide, auto industry tracking company.

A protracted strike could force GM to burn through $8 billion a month, Lehman Brothers analyst Brian Johnson said.

UAW President Ron Gettelfinger, regarded as a pragmatist willing to break with the union's past practices, said GM had pushed the union into striking by not showing a willingness to meet it halfway on crucial issues such as job security.

"You can be pushed off a cliff and that's what happened here," Gettelfinger said, speaking to reporters at a news conference at the union's Detroit headquarters.

The UAW and GM resumed negotiations on Monday afternoon, marking 21 days of unbroken contract talks between the two sides.

GM said it was "disappointed" in the UAW's decision to strike and wanted to reach a deal.

"The bargaining involves complex, difficult issues that affect the job security of our U.S. work force and the long-term viability of the company," GM said in a statement.

WHO BLINKS FIRST?

GM stock, which had traded sharply higher before the UAW strike, closed down 20 cents to $34.74 on the New York Stock Exchange on Monday. The shares have traded in a 52-week range of $38.66 to $28.49.

Many analysts said both GM and its major union had been weakened by the U.S. auto industry's long-running decline -- making it doubtful either side has the stomach for a protracted strike.