GM's 40-day strike drives the biggest drop in US factory output since April

Carl Court/Getty Images

US factory output plummeted the most since April as the 40-day General Motors strike dragged on the crucial automotive sector.

Manufacturing output dropped 0.6% in October after falling 0.5% the previous month, according to a Friday release from the Federal Reserve. Output of motor vehicles and parts plummeted 7.1% last month as members of the United Auto Workers union walked out of factories in a strike to demand improved contracts.

Total industrial production fell roughly 0.8% in October, its biggest decline since May 2018.

Excluding motor vehicles and parts, factory production fell only 0.1% in October, the same decrease seen in September. The GM strike lasted from September 16 to October 25, and cost the automaker nearly $US3 billion.

Roughly 49,000 UAW workers went on strike across 55 GM facilities to secure low-cost healthcare, wage increases, quicker access to full-time status for temporary workers, and increased profit-sharing. The workers ratified a new, four-year contract to end the strike in October.

“We are all so incredibly proud of UAW-GM members who captured the hearts and minds of a nation,” UAW Vice President Terry Dittes said in a statement following the contract’s ratification. “Their sacrifice and courageous stand addressed the two-tier wages structure and permanent temporary worker classification that has plagued working-class Americans.”

GM also announced it would build an electric truck in an “unallocated” Detroit plant, and that it plans to build a new battery factory near an idled plant in Ohio.

UAW’s new contract is now being used as a template for negotiations with Ford and other US automakers.

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