General Motors is building up stocks of cars and light trucks in the US in what are thought to be preparations for a possible strike in the autumn as it heads for a showdown with its unions, the Financial Times (FT) reported on its website.

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The report said Detroit’s Big Three – GM, Ford and DaimlerChrysler – start negotiating a new, three-year labour contract with the United Autoworkers Union on July 18 with a contract expected to be finalised by mid-September. The car makers hope to persuade the unions to accept sweeping job cuts and to share the rising burden of healthcare costs, which is hitting Detroit hard because it has large numbers of retirees, the FT added.

The report said that GM’s stockpile of 1.24 million vehicles, compared with typical inventories of 1.0 to 1.1 million, would allow the company to hold out against strike action for about three weeks longer before dealers ran out of vehicles. But the FT said it is not clear whether the company expects a strike or is just trying to strengthen its hand in the negotiations, which are expected to focus on its healthcare liabilities for pensioners.

The FT said the union negotiations are expected to be the toughest in living memory with Ford hoping to close four US factories, Chrysler mired in losses and GM stuck with unfunded US pension and healthcare liabilities of $70.3 billion.

According to the FT, GM would not confirm or deny the stock build-up was due to strike fears while Ford and Chrysler reportedly said they were not building up stocks in case of a strike.

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