Canadian parts suppliers Linamar Corp. says the United Auto Workers’ strike against General Motors in the United States is costing the company up to $1 million in earnings a day.
More than 46,000 hourly workers at GM plants in the United States have been on strike since Sept. 16, and this week the union rejected the automaker’s latest proposal.
“The resultant decline in GM orders are currently estimated to impact Linamar earnings at a rate of up to $1M CAD [per] day of strike,” the supplier told investors in a post on its website.
Linamar didn’t say which parts it supplies to GM vehicles.
General Motors ceased production of GMC Sierra and Chevrolet Silverado trucks and Chevrolet Impalas at its Oshawa, Ont., plant in September. It also temporarily laid off 700 workers at its St. Catharines, Ont., propulsion plant because the V8 and V6 engines they build and export to the United States aren’t needed at the moment.
The automaker has also idled production at three plants in Silao, Mexico, temporarily laying off about 6,000 workers there because of a parts shortage caused by the strike.
Linamar on Thursday also warned that global light-vehicle production in the third quarter through year-end is expected to be down from the company’s previous June forecast.
“On the plus side, we are seeing more in the way of conquest or takeover business due to failing suppliers that will positively impact future sales, a key advantage for Linamar thanks to our rapid response capabilities and flexible equipment philosophy,” the supplier said.
The Canadian Press reported Thursday morning that shares of Linamar Corp. tumbled in early trading after the auto parts maker issued its warning. Linamar shares were down about 13 per cent or $5.47 at $35.50 in trading on the Toronto Stock Exchange. Shares closed at $36.74, down 10.3 per cent.
Linamar also warned of a downturn its non-automotive divisions, saying markets have softened since the company's second-quarter results were reported in August.
Linamar, which is based in Guelph, Ont., moved up to No. 57 from 62 a year ago on the Automotive News Top 100 Global Suppliers List in June with $4.06 billion in sales in 2018, up from $3.81 billion the previous year.