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GM running out of time?
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July 6, 1998: 10:23 a.m. ET
Report says auto maker must reopen plants within days to restock dealers
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NEW YORK (CNNfn) - Strikes against General Motors Corp. entered their second month Monday, giving the auto maker only a few days to reach a settlement with the United Auto Workers before the labor disruption causes permanent damage to the market, according to a published report Monday.
Half of GM's remaining 850,000 cars and trucks in inventory likely will disappear before Aug. 1 unless the company restarts its plants by mid-July, the Detroit News reported. The newspaper said that if the auto maker doesn't start production in the next few days, dealers will start to run out of cars to sell.
Ronald Zarrella, GM's marketing chief, previously said GM has about a 70-day inventory for retail customers, though he also indicated some slow-selling car models may have to be eliminated to save production and marketing costs.
A GM spokesman declined to speculate on which models might be headed for an early demise. A report in USA Today, however, said the Buick Riviera, which is scheduled to be discontinued after the 1999 model, and the Oldsmobile Cutlass, which GM had planned to cut after the 2000 model, could be likely candidates.
Buick Riviera: headed for an early demise?
Talks continued Monday after negotiations between GM and UAW officials over the holiday weekend failed to produce significant progress in ending strikes at two of the auto maker's parts plants.
Meanwhile, workers at two brake plants in Dayton, Ohio, recently authorized a strike. Those plants struck in 1996 for 17 days, shutting down most of GM's operations and costing it $900 million. Another stamping plant in Indianapolis is scheduled to hold a strike-authorization vote July 12.
However, the UAW has said other plants will not strike until the current negotiations are settled. The union has said the impact of strikes at the Dayton and Indianapolis plants would be insignificant with most of GM already shut down.
Shares still strong
Despite the ongoing strikes, one analyst told CNNfn that investors should hold on to their GM stock.
"I think if you're an owner of GM, now wouldn't be the time to sell the stock," said Liz Ann Sonders, money manager at Avatar Associates. "From a valuation standpoint it still looks fairly decent. I think they will find their way out of this. But any new money, I would certainly put in Ford over GM."
Shares of GM (GM) closed Thursday at 68-7/8, up 3/8.
The battle between GM and the UAW began June 5, when about 3,400 United Auto Workers members from Local 659 walked off their jobs at a Flint, Mich, metal-stamping plant in a dispute over work rules and productivity.
Six days later, on June 11, another 5,800 members of Local 651 struck the Delphi East plant across town, a diversified parts facility that makes spark plugs and instrument clusters.
The strikes have forced GM to shut down 26 of its 29 North American assembly plants. GM has lost approximately $1.2 billion due to the shutdowns. 
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