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Looming auto workers strike could cause $5 billion loss
https://www.whatjobs.com/news/usa/us-employment-news/looming-auto-workers-strike-could-cause-5-billion-loss
By Nithya Bose in US business news, posted August 18, 2023
A potential strike by the United Auto Workers could lead to $5 billion in losses for Detroit automakers within the first 10 days, a report says.
Michigan-based consulting firm Anderson Economic Group (AEG) conducted the study.
It focuses on the consequences of a work stoppage involving around 150,000 UAW workers at General Motors, Ford Motor, and Stellantis.
Read More: United Auto Workers Strike Vote To Start Next Week
The workers are planning for a strike authorization vote as current labor contracts approach expiration.
AEG's analysis calculates the total economic loss, covering losses incurred by UAW workers, manufacturers, and the broader auto industry.
It predicts what could happen if tentative agreements can’t be reached before the contracts lapse on September 14 ET.
Tyler Theile, vice president at AEG, said: “Consumer and dealer losses are typically somewhat insulated in the event of a very short strike.
“However, with current inventories hovering around only 55 days, the industry looks different than it did during the last UAW strike.”
Read More: UAW Pushes For 40 Percent Pay Hike In Talks With Detroit Automakers
Historically, during negotiation phases, the UAW has singled out a lead automaker from the Big Three.
This is a way of concentrating initial bargaining efforts, often employing the threat of a strike.
But the current union leadership has refrained from limiting such actions to a single company.
This potentially makes all three manufacturers susceptible.
Patrick Anderson, CEO of AEG, said: “This is a different year than 2019. It’s a different environment now.”
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UAW President Shawn Fain confirmed contract expirations are rigid deadlines that deviate from past practices and are not open to extension.
Companies face massive losses
AEG's analysis forecasts varying impacts on the automakers based on their US operations and workforce size.
Potential losses for GM over a 10-day strike are projected at $380 million.
Ford and Stellantis could face approximately $325 million and $285 million in losses, respectively.
However, AEG's estimates do not incorporate UAW strike pay, unemployment benefits, income tax implications, or potential settlement bonuses.
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