GM's Troubles Just Beginning

DETROIT: General Motors' damage estimate Tuesday was staggering indeed -- second-quarter earnings plunged 81 percent from a year ago. But the pair of strikes that have left the world's largest carmaker with no parts to make cars with have only begun to wreak their havoc on GM's business. "Lost market share is going to be more of a problem for GM than ever," says TIME Detroit bureau chief Ron Stodghill. "The summer is a strong buying season, and GM dealers don't have enough cars. In the auto business, once you lose a customer, you may not get them back."

The strikes have lasted this long because GM is determined to make a stand to defend its ability to compete. But Stodghill says there's no end in sight. "It's already gone on longer than anyone predicted," he says, and notes that even Wall Street -- generally supportive anytime management gets tough with labor -- has started to worry that the strike's duration may outweigh any benefits derived from taking a hard line. GM stock dropped more than two points Monday after weekend talks blew up, and was creeping back Tuesday only because analysts had fully expected the earnings carnage. In a desperate ploy, GM has asked a federal court to order the UAW into arbitration to settle the strikes, but legal experts don't give the move much of chance. It looks like a long hot summer for GM -- followed by a very long road back.