Detroit auto workers’ strike could cost the US economy nearly $6 billion in just 10 days, a study predicts as union prepares for vote on work stoppage

A 10-day United Auto Workers strike that shuts down Detroit’s “Big Three” automakers would cost the U.S. economy about $5.6 billion, according to a new analysis.

With less than a month before the September 14 deadline to reach new contracts, concerns are growing about the impact of a strike by UAW members on one or all of the Detroit Three.

The new analysis from Anderson Economic Group, an economics consultancy, breaks down the potential losses at each automaker, with Ford Motor set to suffer a loss of $1.49 billion, General Motor $1.466 billion and Jeep maker Stellantis $1.183 billion.

While GM, Ford and Stellantis represent only a portion of the total U.S. auto industry, their employees are concentrated in Michigan – a crucial 2024 election state.

President Joe Biden on Monday urged automakers and the union to reach a “fair deal” even as a vote on strike permits looms next week.

Stellantis, maker of Dodge, Jeep and Chrysler vehicles, would lose $1.183 billion in a 10-day rush, a new analysis shows

Of the total $5.6 billion in losses if the UAW were to strike all three automakers, $859 million would be in lost wages from striking workers, company president Patrick Anderson told Detroit’s Automotive Press Association in a video conference Thursday.

Anderson opted for a ten-day work stoppage in order to make an economic forecast. The UAW has not said whether it will affect any of the Detroit automakers or for how long.

In 2019, UAW workers left their jobs at GM for 42 days. That cost workers nearly $1 billion in lost wages, Anderson estimates. GM posted a pre-tax loss of $3.6 billion as a result of the strike.

Strikes by 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 due to supply chain disruptions that have hampered production for much of 2022 and are still limiting production for some brands.

Meanwhile, about 146,000 UAW members will vote next week on whether to authorize union President Shawn Fain to call strikes against Detroit automakers.

Mustang maker Ford Motor stands to lose $1.49 billion in a 10-day strike

GM, maker of the popular Chevy Silverado, would lose $1.466 billion in a 10-day strike

Members of the UAW, which represents more than 143,000 production 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 upon by the September 14 deadline.

Fain told members in a Facebook Live appearance Tuesday that the talks, which began in mid-July, have been slow and have not yet addressed wages and other economic issues.

“If we want to make progress at the negotiating table, we have to show companies that it’s not all talk,” Fain said of the strike vote.

He told local offices to report the results of their votes to union headquarters by August 24.

While votes for strike permits are a normal part of negotiations in the U.S. auto sector and other industries, that is not the case with the tension surrounding this year’s contract talks in Detroit.

Fain has outlined an ambitious set of goals, including ending the current tiered pay system that pays new hires less than veterans, reintroducing cost-of-living adjustments, or COLA, and restoring defined benefit pension plans that automakers abandoned years ago terminated for new employees. rents.

Ford employees meet with United Auto Workers (UAW) President Shawn Fain at the Ford Michigan Assembly Plant on July 12, 2023 in Wayne, Michigan

The UAW president has inflamed automakers with combative rhetoric delivered via Facebook Live videos, including one in which he trashed contract proposals from Stellantis.

The UAW has not said how it will manage contract negotiations this year. In the past, the union has singled out one of the Detroit Three and negotiated a deal that was then used as a model for contracts at the other two.

Fain has said he does not intend to follow past practice in this round of negotiations.

The advantage for the union in targeting one company at a time is that if employees strike, the union strike fund only pays out the employee value of one company.