MICHIGAN (Bloomberg) - General Motors Corp.'s US factory employees staged their first nationwide strike in 37 years after the largest US automaker failed to reach a new labour agreement with the United Auto Workers.

The walkout, at 11am New York time, came 10 days after the union extended the old contract past its expiration while the two sides negotiated. The latest round of bargaining had run for more than 25 straight hours from yesterday morning until the strike. Talks resumed this afternoon.

"It was a one-way set of negotiations," UAW president Ron Gettelfinger told reporters today in Detroit. "It was going to be General Motors' way at the expense of the workers. The company walked right up the deadline like they really didn't care, and as a result we called a strike."

The walkout reflects a collision between CEO Rick Wagoner's need to cut labor and health-care costs, after $12.4 billion in losses in 2005 and 2006, and Gettelfinger's goal of protecting the pay, benefits and jobs of 73,000 members at GM's US plants. UAW membership has shrunk by two-thirds over the past three decades.

The strike immediately idled more than 80 GM manufacturing and parts operations in the US and threatens to shut down factories in Mexico and Canada. The shutdown will cost GM about 12,200 vehicles in the US each day to start, CSM Worldwide Inc. estimated in a report today. That may spread to more than 18,100 a day counting Canada and Mexico, CSM said.

In addition, the strike may stop work for 100,000 Canadian Auto Workers members at auto-assembly and parts plants in Canada within four days, union President Buzz Hargrove told reporters in Toronto. He said a Windsor, Ontario, transmission plant is shut down and other plants will be shuttered in the next 72 hours.

GM fell 14 cents to $34.80 in New York Stock Exchange composite trading. Shares of Detroit-based GM gained 14 percent this year before today, spurred by optimism about a new labor agreement. Credit-default swaps rose, suggesting a decline in investor confidence.

"We are disappointed in the UAW's decision," GM spokesman Dan Flores said. "The bargaining involves complex, difficult issues that affect the job security of our US workforce and the long-term viability of the company."

Gettelfinger in his press conference bolstered his case against deeper givebacks by pointing to concessions the UAW has made in the last two years.

In 2005, the union agreed for the first time to require retirees to pay a portion of their medical premiums and also agreed to a plan that allowed Wagoner to close 12 North American locations by the end of 2008. GM used buyouts and retirement incentives to get 34,400 union workers to leave last year.

Wagoner has said he needs to pare health costs as GM cedes sales and U.S. market share to Toyota Motor Corp. and other foreign competitors. His goal is to cut fixed expenses such as labor to 25 percent of revenue by 2010, from about 30 percent now.

The focus of the talks had been GM's request that the union take control of a new retiree health-care fund to pay out future liabilities estimated at $50bn in exchange for a one-time payment into the fund from the automaker, people familiar with the discussions said last week. The two sides agreed in principle to the fund, known as a Voluntary Employee Beneficiary Association, or VEBA, three days ago, the people said.

The talks had then moved on to issues involving pay, pensions and other non health-care proposals, the people said.

"This strike is in no way about VEBA discussions," Gettelfinger said.

The UAW had not called a nationwide strike against GM since 1970, when workers went off the job for 67 days. Since then, the union has opted for strategic plant-by-plant strikes, some of which shut almost all of GM's US factories, the last in 1998.

"We didn't want to walk out," said Billy Cummings, a 32- year GM worker at the transmission plant in Warren, Michigan, as motorists honked car horns in support. "But you've got to take a stand for what's right."

As of September 1, GM had enough cars and trucks at dealerships to last 67 days at the current rate of sales, Automotive News reported.