More than 70,000 United Auto Workers (UAW) nationwide walked off their posts at General Motors at 11 a.m. this morning, after negotiations between the two organizations failed to reach a labor agreement. Contract talks had officially begun July 23rd.

At issue, GM is looking to make significant cost reductions to remain competitive, even solvent. Some proposed cuts require concessions from the UAW, which seeks to protect job security and benefits for its workers.

The UAW this morning declared its strike intentions, including the following statement:

"We're shocked and disappointed that General Motors has failed to recognize and appreciate what our membership has contributed during the past four years," said UAW President Ron Gettelfinger. "Since 2003 our members have made extraordinary efforts every time the company came to us with a problem: the corporate restructuring, the attrition plan, the Delphi bankruptcy, the 2005 health care agreement. In every case, our members went the extra mile to find reasonable solutions."

Likewise, General Motors issued the following press release:

We are disappointed in the UAW's decision to call a national strike.

The bargaining involves complex, difficult issues that affect the job security of our U.S. work force and the long-term viability of the company. We are fully committed to working with the UAW to develop solutions together to address the competitive challenges facing General Motors.

We will continue focusing our efforts on reaching an agreement as soon as possible.

The labor dispute comes at a time when GM is showing positive signs while facing increasingly tough competition. Many of the latest products we have sampled have been competitive (excluding the Pontiac Solstice and Saturn Sky), and in some cases, stand with the best in the class. The Saturn Outlook for example, provides an excellent alternative to a large, truck-based SUV for buyers who don't need the extra towing capacity or off-road ability of a truck. (General Motors/John F. Martin photo shows employees with Outlook at the Lansing Delta Township manufacturing facility.) The Chevrolet Avalanche is our top-rated pickup truck, and the related Chevrolet Silverado also scored well. Further, some future models, such as the redesigned Cadillac CTS and Chevrolet Malibu show promise.

Should this strike linger, it could cause GM to stumble, losing what momentum it has gained during the recent reorganizations and cost-cutting measures. What it means for consumers is hard to predict. Short term, there may be fewer incentives due to dwindling dealer inventory. Products such as the Outlook, GMC Acadia and Buick Enclave are already in short supply. Long term, both car shoppers and investors may see their confidence erode, which would reflect back on GM's finances. Time will tell.

UAW contracts with Chrysler Group and Ford Motor Company also expired on September 14th. Therefore, the results of the current negotiations with GM may have impact for all three automakers and their customers.

--Jeff Bartlett