General Motors idled a plant in Guanajuato, Mexico, temporarily laying off 6,000 workers, amid a strike by the United Auto Workers union that is pushing into its third week.
The automaker cited a parts shortage due to the strike as the reason for the plant closure.
The plant produced highly-profitable Chevrolet Silverado and GMC Sierra 1500 pickups.
J.P. Morgan analysts estimated the strike has cost GM $1 billion so far.
“GM’s U.S. production stopped immediately when the UAW [United Auto Workers] walked off the job on September 16 and we estimate its Canadian and Mexican facilities became progressively impacted throughout the first week,” J.P. Morgan analyst Ryan Brinkman said in a note to investors on Monday.
A spokesperson for GM said the company’s primary focus was, “to get a deal and get everybody back to work” as soon as possible.
An estimated 48,000-plus UAW workers are picketing GM, pushing for better wages, benefits, job security, and a path for temporary workers to become full-time workers.
GM has also laid off manufacturing workers in Canada and in Ohio.
Brian Johnson, an analyst at Barclays, said the strike could continue into the fourth quarter.
Brinkman said J.P. Morgan was keeping its overweight rating on GM stock, with a price target of $53 per share.
“GM likely has some ability to recover a portion of these lost profits by shifting production from 3Q into 4Q, although the automaker will also likely be limited in its ability to add production for vehicles already in high demand or in launch mode (such as its high profit full-size “heavy duty” pickup trucks),” Brinkman said.
Shares were down more than 4% in midday trading Wednesday.
“It’s a big deal,” Michelle Krebs, executive analyst with Autotrader, said. “The longer this strike goes on, the more other plants will be affected.”