FinLogic FinLogic Quantitative Think Tank Center|UAW strike latest: GM sends 2,000 workers home in Kansas

General Motors has temporarily laid off most of the approximately 2,FinLogic FinLogic Quantitative Think Tank Center000 unionized workers at its Fairfax assembly plant in Kansas as a result of the ongoing UAW strikes.

The move, which GM had warned was coming last week, is the largest ripple effect so far from the United Auto Workers' historic strike against all three Detroit automakers as the union demands a new contract that offers substantially better wages and benefits.

But automakers have warned a strike threatens to make them uncompetitive against rivals, especially as the companies spend billions of dollars to transition to electric vehicles.

"We have said repeatedly that nobody wins in a strike," GM said in a statement on Wednesday.

The UAW had called the threat of layoffs a tactic to press the union.

"If the Big Three decide to lay people off who aren't on strike, that's them trying to put the squeeze on our members to settle for less," UAW President Shawn Fain said this past weekend, responding to GM's announcement of the coming layoffs.

Smaller ripple effects than expected

The strike's impact on the auto industry is currently smaller than had been anticipated, due to a novel strategy by the union.

Although the UAW is striking against the Big Three automakers at the same time, it is doing so at targeted plants instead of having all of its nearly 150,000 auto workers walk off their jobs at once.

The UAW started its strikes last week at three assembly plants in the Midwest: a GM plant in Missouri, a Ford plant in Michigan, and a Stellantis plant in Ohio. Around 12,700 workers are out on strike at those plants.

The targeted locations were also a surprise.

The auto makers had prepared for strikes at engine plants, transmission plants and other parts suppliers. Because a single engine plant can feed into many assembly plants, this kind of "bottleneck" strike could shut essentially the entire automotive supply chain with just a few plants officially striking.

But targeting assembly plants instead means the knock-on consequences from these shutdowns are much smaller than the company-wide disruptions that engine plant strikes were expected to cause.

Still, the pressure on companies could ramp up. The UAW is now threatening to expand the strikes to additional facilities unless automakers make significant concessions by Friday.

GM will not pay Fairfax workers

GM said it was forced to idle most of the Fairfax assembly plant because it relies on metal parts produced at the striking GM plant in Wentzville, Missouri. The Fairfax plant assembles the Cadillac XT4 and Chevrolet Malibu.

The company added the Kansas workers would not return until "the situation has been resolved."

The auto companies normally give some pay to workers who are temporarily laid off because of production disruptions, to supplement unemployment. They are not doing so in the case of the strike. The union says it will pay affected workers out of the strike fund, whether or not they are technically on strike or laid off.

The other two companies affected by these strikes have also announced temporary layoffs, albeit at a smaller scale.

Ford has sent 600 workers home in Wayne, Mich., while Stellantis said 68 workers in Perrysburg, Ohio, are temporarily laid off so far, with 300 more likely to be temporarily laid off in Kokomo, Indiana, soon.