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September 25, 2007 7:00 AM, EDT

GM Talks Resume; Two Canadian Plants Close

Protracted Work Action Could Cost ‘Billions,’ Analyst Writes

A United Auto Workers strike against General Motors Corp. lasting longer than a week or two could cost GM billions, and two Canadian plants have been idled as a result of the strike, news services reported Tuesday.

More than 70,000 UAW members walked off the job Monday at U.S. GM plants, primarily over job security issues. The two sides resumed talks Tuesday, the Detroit News reported on its Web site.

A strike of two weeks or less would not hurt the automaker’s position and could improve its inventory, Lehman Brothers analyst Brian Johnson wrote Monday in a note to investors, the Associated Press reported.

But a longer strike would be harmful, causing GM to use up $8.1 billion in reserves in the first month and $7.2 billion in the second, Johnson wrote.

Meanwhile, two GM plants in Canada have closed and a third was up for review, Reuters reported, citing a GM Canada official.

GM Canada closed its plant in Oshawa, Ontario, early Tuesday on the second day of the U.S. strike, Reuters said. The plant employs 3,000 workers and builds Chevrolet cars, and is closely integrated with GM’s U.S. operations and depends on them for some parts, Reuters said.

On Monday, GM’s transmissions plant in Windsor, Ontario, shut down. That facility employs 1,400, Reuters said.