The strike by General Motors (NYSE:GM) workers has now cost the automaker more than $1 billion during the third quarter, with GM’s slowed production continuing longer than the firm expected.
J.P. Morgan also says the UAW strike, now in its third week, is longer than the ratings agency expected. About 48,000 UAW members have been picketing since Sept. 1, with workers receiving a fraction of their weekly compensation, made up in strike payments from UAW.
J.P. Morgan is keeping its overweight rating on GM’s stock with a price target of $53 a share because of it may be able to make up some of the lost production.
But the parties are arguing most about on point, which is the use of temporary employees.
The temporary workers are at the center of negotiation between the company and the striking UAW regarding a new four-year contract. The temporary workers are UAW members who perform the same roles as the permanent workers, but they receive half the pay and much fewer benefits.
The union is seeking to have those workers get a clear path towards being permanent. The union also wants the temporary workers to receive compensation and benefits that closely match what the permanent employee receives.
Temporary workers comprise around 7% to 10% of the total workforce of GM, and at the end of last year, the company had 4,100 Temps. On average GM pays its workers $63 per hour while temporary workers usually earn less than $20, and they have fewer benefits.
The stock opened Tuesday down 17 cents to $37.31.
