By Joseph White
DETROIT (Reuters) – A ten-day strike by the United Auto Workers that shuts down the Detroit Three automakers could cost the manufacturers, workers, suppliers and dealers more than $5 billion according to a new analysis by the Anderson Economic Group, an economic consulting firm.
With less than a month before a Sept. 14 deadline to reach new contracts, concerns about the impact of a walkout by UAW members at one or all of the Detroit Three are growing.
While General Motors, Ford Motor and Stellantis North America represent only a portion of the total U.S. auto industry, their workers are concentrated in Michigan – a pivotal 2024 election state. U.S. President Joe Biden on Monday urged the automakers and the union to come to a “fair agreement.”
A ten-day strike against GM alone could have an economic cost of more than $1.4 billion, as could a ten-day strike against Ford alone, Patrick Anderson, the firm’s president, told Detroit’s Automotive Press Association in a videoconference on Thursday.
A ten-day strike against Stellantis North America could have a total economic cost of just under $1.2 billion, Anderson said.
Of the $5 billion in total losses should the UAW strike all three automakers, $859 million would be wages lost by striking workers, Anderson’s study estimated.
Anderson chose a ten-day work stoppage to build an economic forecast. The UAW has not said whether it will strike any of the Detroit automakers or for how long. In 2019, UAW workers walked off the job at GM for 42 days. That cost workers nearly $1 billion in lost wages, Anderson estimated. GM recorded a $3.6 billion pretax loss related to the walkout.
Walkouts at the Detroit Three could benefit Tesla and other non-union automakers including Toyota Motor, Honda Motor, Nissan Motor and Hyundai Motor, Anderson said. However, inventories of unsold vehicles are unusually low because of supply-chain disruptions that hobbled production for much of 2022, and are still crimping output for some brands.
The Anderson Economic Group, based in East Lansing, Michigan, released its estimate as members of the UAW, which represents more than 143,000 manufacturing workers at the Detroit Three automakers, are voting to authorize union President Shawn Fain to call for a strike if new contracts are not agreed by the Sept. 14 deadline.
While strike authorization votes are a normal feature of bargaining in the U.S. auto sector and other industries, the tension surrounding this year’s contract talks in Detroit is not.
Fain has outlined an ambitious set of goals, including ending the current tiered wage system that pays new hires less than veterans, reinstating cost-of-living adjustments, or COLA, and restoring defined-benefit pension plans that the automakers ended years ago for new hires.
The UAW president has rattled automakers with combative rhetoric, delivered via Facebook Live videos, including one where he threw contract proposals from Stellantis into a trash can.
The UAW has not said how it will manage contract negotiations this year. In the past, the union has picked one of the Detroit Three and negotiated a deal it then used as the pattern for contracts at the other two. Fain has said he does not intend to follow past practice in this round of bargaining.
The advantage for the union of targeting one company at a time is that if workers strike, the union strike fund is paying only one company’s worth of workers.
(Reporting by Joe White in Detroit; Editing by Matthew Lewis)
