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blow for subcontractors


New York (AFP)

The continuation of the General Motors workers strike for more than three weeks begins with heavy economic activity in Michigan (north) and the US Midwest as more subcontractors send employees home.

Technical layoffs have gradually affected the suppliers of GM's 31 U.S. plants since the start of the social movement on September 16, said Steve Gruener, president of UAW (United Auto Workers) Local in Flint, Michigan. .

In addition to the 1,800 GM employees on strike in his region, another 1,200 subcontracted employees have now been made redundant, he told AFP in a telephone interview.

"The blow to the economy is already huge," Gruener said, adding that the union is "determined to negotiate a fair and equitable contract for our members."

"We will remain on strike for as long as it takes," he added, as talks continued between GM and the union on Wednesday.

Nearly 50,000 U.S. GM workers are on strike amid demands for pay raises and improvements in working-class conditions following the bank's historic aid, which Obama declined in 2009.

The requirements relate to job security, but also health insurance and temporary worker status.

– Impact on GDP –

"What started as an event that affects only a specific group of workers has now become widespread," said Brian Peterson, director of economic analysis at Anderson Economic Group, a research firm.

In a report this week, Anderson said the strike directly or indirectly affected close to 150,000 auto industry workers, including 25,000 GM workers and about 75,000 employees of auto parts companies.

By September 30, the Michigan Unemployment Insurance Agency had already processed the compensation claims of about 5,000 auto vendor workers for the strike, a Michigan government spokesman said.

Major subcontractors also have significant operations in other industrial states of the Midwest, such as Ohio, Indiana and Illinois.

And this region includes a number of key states that could play a crucial role in the 2020 presidential election.

Paul Traub, an economist at the Federal Reserve (Fed) in Detroit, said the economic cost of social conflict in Michigan is about $ 42 million a week based on lost wages.

GM typically produces 8,400 vehicles a day in the United States. Stopping production is about a $ 100 million daily loss.

"The economic impact is beginning to be noticeable," Traub told AFP, adding that a $ 2 billion production loss would affect the country's gross domestic product (GDP) estimates. the whole country.

"It's a blow to GM manufacturing," said Kristin Dziczek, vice president of the Michigan Center for Economic Research.

The strike is also expected to weigh on the results of automotive component suppliers, which lead Wall Street analysts to lower the profit forecasts of large companies like Magna, Canada's supplier to General Motors.

"We continue to monitor the situation and hope for a peaceful solution," a Magna spokeswoman said.

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