* UAW strike is first one against GM since 2007
* Lost production could cost GM up to $50 million a day
* President Trump urges both sides to 'make a deal'
*(Adds new Trump comment, talks still continuing, Moody's note)
By Nick Carey and Ben Klayman
DETROIT, Sept 16 (Reuters) - Negotiators for General MotorsCo and the United Auto Workers were continuing talksMonday afternoon to resolve a strike that shut down theautomaker's highly profitable U.S. operations.
The UAW on Sunday launched the first company-wide strike atGM in 12 years, saying negotiations toward a new nationalagreement covering about 48,000 hourly workers had hit animpasse.
Workers took to picket lines outside GM factories, wavingsigns declaring "UAW On Strike." During the walkout, UAW memberswill get $250 a week from the union's strike fund.
The UAW confirmed Monday morning that talks had resumed andGM said the talks were continuing more than five hours later.Lost production could cost GM up to $50 million a day in pretaxprofit, RBC Capital Markets estimated in a note Monday. GM couldmake up the lost production with overtime work after asettlement.
Moody's Investors Service said in a note Monday the criticalissue is whether GM will "secure the operating flexibilitynecessary" to address challenges including higher hourly coststhan foreign automakers, a potential severe downturn in U.S.auto sales and the need for automakers "to begin transitioningto the production of more electric vehicles that will likelyrequire fewer workers to assemble."
Company and union officials say there are a number of issuesto be resolved and that no immediate resolution on Monday isexpected.
Contract talks with GM have been overshadowed by amushrooming U.S. federal corruption probe into top unionofficials. The investigation has raised questions about UAWpresident Gary Jones, who a source said was an unnamed officialcited in a searing federal complaint last week detailing allegedembezzlement by union leaders.
The strike quickly became a political issue, as both U.S.President Donald Trump and Democrats who want to unseat him in2020 weighed in. Trump and Democrats see the votes of UAWmembers in the Midwest as critical to victory.
Trump on Monday told reporters he hoped the strike was ashort one after taking to Twitter to urge the UAW and GM to "gettogether and make a deal!" GM spokesman Tony Cervone said theautomaker "couldn't agree more" with Trump's call.
GM Chief Executive Mary Barra met with Trump ahead of thestrike deadline. Trump has attacked GM for Barra's decision tostop 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 anassembly plant in Detroit. The UAW has said workers deservehigher pay after years of record profits for GM in NorthAmerica.
GM argues the plant shutdowns are necessary responses tomarket shifts, and that UAW wages and benefits are expensivecompared with competing non-union auto plants in southern U.S.states.
GM initially insisted the UAW dramatically boost its shareof healthcare costs but largely dropped that demand, union andcompany officials said.
In a statement Sunday, GM outlined its offer to the union,saying the package included solutions for the Michigan and Ohioassembly 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 couldproduce a future electric pickup truck at the Detroit-Hamtramckplant that now has no future assignment.
GM could also build an electric vehicle battery plant inLordstown, and go through with the proposed sale of the plant toa group affiliated with electric vehicle start-up WorkhorseGroup Inc.
A new battery plant could give some UAW workers at Lordstownthe chance to remain with GM.
The UAW’s top negotiator at GM said the company's proposalcame just two hours before the strike deadline, and laid blamefor the strike on the automaker.
“Had we received this proposal earlier in the process, itmay have been possible to reach a tentative agreement and avoida strike,” UAW Vice President Terry Dittes wrote in a letter toGM 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 acrossNorth America and could hurt the broader U.S. economy. Prolongedindustrial action would also cause hardship for GM hourlyworkers on greatly reduced strike pay. Suppliers of parts andservices to GM's U.S. operations could also suffer from a longshutdown, as could dealers and consumers.
GM's workers last went out on a brief two-day strike in 2007during 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 ofworkers who made concessions in 2009 to help GM through itsgovernment-led bankruptcy.
Some of those concessions are now matters of disagreement.The union wants to limit GM's use of temporary workers in itsplants, and narrow the pay gap between new hires and veteranworkers.
The strike will test both the union and GM at a time whenthe U.S. auto industry is facing slowing sales and rising costsassociated with launching electric vehicles and curbingemissions.
The impact of the strike on dealers and car shoppers will bedelayed. GM started off the strike with healthy levels ofinventory of some its key, high-margin vehicles.
A prolonged strike could delay the planned introduction nextspring of GM’s redesigned full-size SUVs in Arlington, Texas.Among the company’s most profitable vehicles, they include theCadillac Escalade, the GMC Yukon and the Chevrolet Tahoe andSuburban.(Reporting by Nick Carey, David Shepardson, Ben Klayman andJoseph White;Writing by Nick Carey and Joseph White; Editing by Andrea Ricci)