Labor disputes have been a hot topic in the U.S. in the last several weeks, and General Motors is currently suffering fallout from a labor dispute involving the drivers responsible for transporting many of their new vehicles to dealers and anxious customers.
As of right now, some 1,704 brand new vehicles, valued at nearly $47 million, are being effectively held hostage by Allied Systems Ltd., a transport company responsible for delivering vehicles from GM to its dealer network, according toThe Detroit News. The situation began to develop on March 17th when Allied stopped delivering vehicles due to an ongoing labor dispute.
The labor dispute stemmed from a 20 percent pay cut issued by Allied on March 10, which was later rescinded, but then was complicated when GM refused to amend its contract and accept a 15 percent price hike, among other changes. As a result, Allied stopped vehicle deliveries, and is believed to be holding all 1,704 vehicles in Dearborn, Michigan, and Fort Wayne, Indiana.
The lawsuit filed by GM against Allied is requesting that the courts demand the transport company release all 1,704 vehicles immediately, as well as pay costs and unspecified damages. GM argues that its inability to deliver its inventory in a timely manner will tarnish the automaker’s image and impede its crucial post-bankruptcy recovery efforts, as well as leave dealers without inventory, which will result in lost sales for both GM and individual dealers.
GM’s lawsuit also pointed out that should the transporter continue to fail to deliver the vehicles the resulting costs will “likely beyond the financial ability of Allied to satisfy, further rendering GM without an adequate legal remedy.”
Neither party was able to comment on the developments of the lawsuit when questioned by the paper.
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