General Motors Corp. is losing almost a third of its daily U.S. and Canadian vehicle production as parts shortages caused by an 11-day supplier strike shut down more of the automaker's manufacturing network.

GM is building about 5,000 fewer vehicles each day than its 2007 average of 16,000, according to a Bloomberg estimate. The world's largest automaker has closed seven truck factories so far and plans to trim output at another next week.
The closures, sparked by a strike at former subsidiary American Axle & Manufacturing Holdings Inc., will help reduce a stockpile of GM trucks that on Feb. 1 was 24 days higher than the industry average.
“GM's truck supply can actually benefit by not producing as many,” said Efraim Levy, a Standard & Poor's equity analyst in New York. “Anything less than a month is a good thing, then it starts to get difficult.” He rates GM as a “sell.”
The automaker yesterday announced nine additional engine, transmission and metal-stamping factories would be closed starting March 10 in Michigan, Indiana, Ohio and New York state. That will bring the number of affected parts and auto-assembly factories at Detroit-based GM to 29.
The Bloomberg estimate is an average based on the number of production days in 2007. It doesn't include three plants for which GM won't disclose output totals. GM spokesman Tom Wickham declined comment in an interview. 113-Day Supply
At the beginning of last month, GM had 627,600 trucks in inventory, enough to supply U.S. dealers for 113 days, according to the latest figures from trade publication Automotive News. Analysts consider a 60-day supply normal.
When GM puts an eighth assembly plant on a shortened schedule beginning March 10, the daily losses will run to about 5,400 vehicles. GM has said the plants will remain closed, or on reduced schedules, indefinitely until Detroit-based American Axle resolves the strike. The walkout began Feb. 26 over wage, health-care and pension issues.
American Axle held negotiations with United Auto Workers leadership yesterday, and the talks are expected to continue this weekend, spokeswoman Renee Rogers said in an interview.
GM, American Axle and other suppliers may be put on CreditWatch should the work stoppage “drag on more than another week or so,” S&P debt analyst Robert Schulz said yesterday in a note. S&P rates GM's debt B, or five steps below investment grade.
GM has halted production at large pickup and sport-utility vehicle plants in Ohio, Michigan, Indiana and Ontario.
GM fell 39 cents, or 1.7 percent, to $21.96 yesterday in New York Stock Exchange composite trading, for a seventh consecutive decline and a 22-month low.
American Axle gained $2.13, or 11 percent, to $22.28, after a report from KeyBanc Capital Markets said the supplier may save $50,000 annually per worker following the strike.
Credit-default swaps on GM debt reached their highest price since April 19, 2006, gaining 53 basis points to 1,130 basis points, according to CMA Datavision in New York. The contracts are designed to protect bondholders against default. An increase in price indicates a decline in the perception of a company's credit quality.
(Source: Bloomberg)