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Thousands of US workers employed by General Motors (GM) went on strike yesterday, after contract talks between company bosses and union leaders stalled.

GM factory workers across the US formed pickets outside plants after a deadline to reach an agreement between the two sides passed.

However the United Auto Workers (UAW) union, which has some 73,000 members employed by GM, has resumed negotiations with the automaker's management.

GM, which is struggling to return its US operations to profitability and combat growing competition from Japanese rivals, will no doubt be hoping that the strike is short-lived.

Estimates suggest production at GM factories in the US could be down by some 12,000 cars a day for as long as the strike lasts. It is thought that the walk-out could hit Canadian factories by Thursday, while a subsequent lack of parts could also hit other overseas automotive plants by the end of next week.

At a news conference yesterday UAW president Ron Gettelfinger confirmed the union's decision to stage its first nationwide strike during contract negotiations since 1976.

The union has said that GM workers are striking over job security, economic issues, benefits for active workers and investment in future products.

"We were pushed into a strike and that's where we are at," said Mr Gettelfinger, commenting after weeks of negotiations with GM over renewed contacts for the union's members.

GM said that it was "disappointed" by UAW's decision to call a national strike in the US.

"The bargaining involves complex, difficult issues that affect the job security of our US work force and the long-term viability of the company," the carmaker said in a statement.

"We are fully committed to working with the UAW to develop solutions together to address the competitive challenges facing General Motors," the firm added.

However while both sides still appear to be wrangling over job security, it is understood that an agreement has been reached over GM's reported plans to establish a new healthcare trust for former workers.

The plan would see GM make a one-off lump sum payment into the voluntary employee beneficiary association (VEBA), in order to transfer responsibility for providing healthcare for retired workers away from the company.