By Ben Klayman and David Shepardson

DETROIT/WASHINGTON (Reuters) – General Motors Co took the unusual step of appealing directly to employees in a blog post on Friday that laid out the terms of the automaker’s latest offer aimed at ending a month-long strike.

While emphasizing GM’s commitment to the collective bargaining process, the letter, signed by Gerald Johnson, executive vice-president for global manufacturing, circumvents United Auto Workers (UAW) leadership and points to frustration at a lack of progress on ending a conflict that has already cost the company more than $1 billion.

The UAW strike began on Sept. 16, with the union’s 48,000 members seeking higher pay, greater job security, a bigger share of profits and protection of healthcare benefits. Credit Suisse estimated the loss could hit about $1.5 billion.

As part of its revised offer, GM boosted the amount it plans to invest in the United States to about $9 billion from its previous offer of $7 billion, a source familiar with the offer said.

Of the new total, $7.7 billion would be invested directly in GM plants, with the rest going to joint ventures including a potential battery plant near the Lordstown, Ohio, factory that has been idled, the source said.

GM stock was up 2.2 percent in midday trading.

The company said the offer also includes increased compensation through wages and one-time payments, preserving industry-leading healthcare benefits without increasing workers’ costs, enhanced profit sharing with unlimited upside and a higher ratification bonus than the $8,000 previously offered.

For temporary workers, GM said its offer would create a path to permanent employment and include a ratification bonus.

“The strike has been hard on you, your families, our communities, the company, our suppliers and dealers,” GM’s letter read, saying the latest offer increased compensation and promised a path to full-time jobs for temporary workers.

“We have advised the union that it’s critical that we get back to producing quality vehicles for our customers. … Our offer builds on the winning formula we have all benefited from over the past several years.”

A UAW spokesman declined to comment on the new offer.

In a Thursday letter to UAW leaders, GM urged the union to agree to around-the-clock negotiations, while the union insisted in its own letter on dealing with five specific issues first before it responded to the broader proposal made to union negotiators Monday.

GM Chief Executive Officer Mary Barra met Wednesday with UAW President Gary Jones and lead GM negotiator Terry Dittes to urge a faster response by the union to the company’s last offer.

One of the five issues the committees are discussing is the fate of four U.S. factories that GM has indicated could close; another is future technological changes to production, according to the UAW letter. Dittes said he did not know when the issues would be resolved, suggesting a final deal may not be close.

UAW workers are concerned that as GM shifts to more electric vehicles it will require fewer workers, and that workers in battery production plants may earn less than those at existing transmission plants.

Reuters previously reported GM told the UAW it could build a new battery plant near the now-shuttered Lordstown factory, and assemble an electric truck at its Detroit Hamtramck plant.

Moody’s said in a Friday report that GM must maintain its flexibility under any new deal to build electric and self-driving vehicles without its fixed costs rising further. It said GM’s annual costs in wages and benefits are more than $1 billion higher than foreign automakers operating U.S. plants.

“It is critical for GM that any new UAW contract not allow an even wider differential,” Moody’s said.

“We expect that the long-term strategic benefits of obtaining a UAW contract … will outweigh the costs of enduring a protracted strike that might last into November,” Moody’s added.

On Sunday, the UAW said the talks took a “turn for the worse” and on Tuesday the union urged GM to boost U.S. vehicle production. Union workers are angry about production of trucks and sport-utility vehicles in Mexico.

The UAW’s membership is largely in the Midwest, in states that could be critical to both sides in the 2020 presidential election, so the strike has drawn the attention of Republican President Donald Trump, his rivals seeking the Democratic nomination, and U.S. lawmakers. They have urged GM to build more vehicles in the United States and shift work from Mexico.

(Additional reporting by Ankit Ajmera in Bengaluru; editing by Patrick Graham, Saumyadeb Chakrabarty and David Gregorio)

By Nick Carey and Ben Klayman

DETROIT (Reuters) – Negotiators for General Motors Co and the United Auto Workers were continuing talks Monday afternoon to resolve a strike that shut down the automaker’s highly profitable U.S. operations.

The UAW on Sunday launched the first company-wide strike at GM in 12 years, saying negotiations toward a new national agreement covering about 48,000 hourly workers had hit an impasse.

Workers took to picket lines outside GM factories, waving signs declaring “UAW On Strike.” During the walkout, UAW members will get $250 a week from the union’s strike fund.

The UAW confirmed Monday morning that talks had resumed and GM said the talks were continuing more than five hours later. Lost production could cost GM up to $50 million a day in pretax profit, RBC Capital Markets estimated in a note Monday. GM could make up the lost production with overtime work after a settlement.

Moody’s Investors Service said in a note Monday the critical issue is whether GM will “secure the operating flexibility necessary” to address challenges including higher hourly costs than foreign automakers, a potential severe downturn in U.S. auto sales and the need for automakers “to begin transitioning to the production of more electric vehicles that will likely require fewer workers to assemble.”

Company and union officials say there are a number of issues to be resolved and that no immediate resolution on Monday is expected.

Contract talks with GM have been overshadowed by a mushrooming U.S. federal corruption probe into top union officials. The investigation has raised questions about UAW President Gary Jones, who a source said was an unnamed official cited in a searing federal complaint last week detailing alleged embezzlement by union leaders.

The strike quickly became a political issue, as both U.S. President Donald Trump and Democrats who want to unseat him in 2020 weighed in. Trump and Democrats see the votes of UAW members in the Midwest as critical to victory.

Trump on Monday told reporters he hoped the strike was a short one after taking to Twitter to urge the UAW and GM to “get together and make a deal!” GM spokesman Tony Cervone said the automaker “couldn’t agree more” with Trump’s call.

GM Chief Executive Mary Barra met with Trump ahead of the strike deadline. Trump has attacked GM for Barra’s decision to stop building small cars at an assembly plant in Lordstown, Ohio. The state is pivotal to Trump’s re-election.

The union wants to stop GM from closing Lordstown and an assembly plant in Detroit. The UAW has said workers deserve higher pay after years of record profits for GM in North America.

GM argues the plant shutdowns are necessary responses to market shifts, and that UAW wages and benefits are expensive compared with competing non-union auto plants in southern U.S. states.

GM initially insisted the UAW dramatically boost its share of healthcare costs but largely dropped that demand, union and company officials said.

In a statement Sunday, GM outlined its offer to the union, saying the package included solutions for the Michigan and Ohio assembly plants currently lacking products, $7 billion in U.S. investment and a signing bonus of $8,000 per worker.

A person familiar with GM’s offer said the company could produce a future electric pickup truck at the Detroit-Hamtramck plant that now has no future assignment.

GM could also build an electric vehicle battery plant in Lordstown, and go through with the proposed sale of the plant to a group affiliated with electric vehicle start-up Workhorse Group Inc.

A new battery plant could give some UAW workers at Lordstown the chance to remain with GM.

The UAW’s top negotiator at GM said the company’s proposal came just two hours before the strike deadline and laid the blame for the strike on the automaker.

“Had we received this proposal earlier in the process, it may have been possible to reach a tentative agreement and avoid a strike,” UAW Vice President Terry Dittes wrote in a letter to GM on Sunday, according to a copy viewed by Reuters.

GM shares closed down 4.3% on Monday.

ECONOMY COULD FEEL IMPACT

A strike will very quickly shut down GM’s operations across North America and could hurt the broader U.S. economy. Prolonged industrial action would also cause hardship for GM hourly workers on greatly reduced strike pay. Suppliers of parts and services to GM’s U.S. operations could also suffer from a long shutdown, as could dealers and consumers.

GM’s workers last went out on a brief two-day strike in 2007 during contract talks. A more painful strike occurred in Flint, Michigan, in 1998, lasting 54 days and costing the No. 1 U.S. automaker more than $2 billion.

The UAW has framed the plant closures as a betrayal of workers who made concessions in 2009 to help GM through its government-led bankruptcy.

Some of those concessions are now matters of disagreement. The union wants to limit GM’s use of temporary workers in its plants, and narrow the pay gap between new hires and veteran workers.

The strike will test both the union and GM at a time when the U.S. auto industry is facing slowing sales and rising costs associated with launching electric vehicles and curbing emissions.

The impact of the strike on dealers and car shoppers will be delayed. GM started off the strike with healthy levels of inventory of some its key, high-margin vehicles.

A prolonged strike could delay the planned introduction next spring of GM’s redesigned full-size SUVs in Arlington, Texas. Among the company’s most profitable vehicles, they include the Cadillac Escalade, the GMC Yukon and the Chevrolet Tahoe and Suburban.

(Reporting by Nick Carey, David Shepardson, Ben Klayman and Joseph White; Writing by Nick Carey and Joseph White; Editing by Andrea Ricci)