Steep GM Drop Puts Heat on Labor Talks

General Motors, swimming in losses despite major cuts in spending, saw its bottom line plunge a staggering 90% in the first quarter. Somewhat improved automotive profits, especially in emerging markets, were undercut by heavy losses from defaults on high-risk home loans at lending unit GMAC.

The Wall Street Journal reports that losses of $46 million in North America will increase pressure to cut labor costs—and set the stage for a showdown with unions like the UAW this summer." These are going to be historic negotiations," said a pessimistic S&P auto analyst, who downgraded GM's stock from "hold" to "sell." (More General Motors stories.)