Ford and GM could be losing $100 million every week with union workers on strike
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- Auto workers at the Detroit 3 carmakers are on strike.
- The work stoppage is costing Gm and Ford at least $100 million per week, Goldman Sachs estimates.
- That is likely to get worse as the strike progresses.
Detroit automakers Ford and General Motors stand to lose $100 to $125 million in revenue per week from the United Auto Workers strike, analysts at Goldman Sachs estimate.
As of Monday, three factories had been strategically targeted by the UAW: Part of a Ford plant in Wayne, Michigan; a GM assembly plant in Wentzville, Missouri; and a Stellantis assembly complex in Toledo, Ohio (one at each of the Detroit automakers). The targeted plants account for nearly 13,000 workers and more than 14,000 vehicles in weekly production.
The bank's calculations are based on revenue estimates for Ford and GM based on weekly production of the affected plants, as well as the specific vehicle models that are manufactured at these plants. Ford's Wayne plant makes the Bronco and Ranger while GM's Wentzville plant makes models like the GMC Canyon and Colorado, according to the bank's September 17 note.
Though unionized Stellantis workers are also on strike, Goldman Sachs did not estimate the potential impact on the Jeep-maker.
In response to the targeted strike, the auto companies are already idling operations elsewhere. GM will likely halt production at its Fairfax plant in Kansas City, Kansas this week, impacting 2,000 workers, while Ford has temporarily laid off 600 workers due to a pause at its Michigan Assembly Plant body department (workers are unable to continue production given the strike is impacting that plant's assembly and paint areas).
The UAW, which has nearly 150,000 members, is likely to pause labor at additional factories, depending on how negotiations go in the coming days.
What's at stake
The UAW went on strike on Friday, September 15 after weeks of negotiating failed to produce an agreement with the Detroit 3.
Union members are fighting for increased wages, cost of living adjustments, the return of pensions, a 32-hour work week, and more. These demands are especially timely coming off the few years of blockbuster profits that automakers saw during the supply-and-demand crunch of the pandemic.
Conversations with automakers continued throughout the weekend, according to both sides, but not enough progress was made.
A prolonged work stoppage will not only impact the Detroit 3 and their workers, but the rest of the industry and car buyers, too.
Vehicle shoppers looking for a great deal on a Detroit 3 car can likely say goodbye to the incentives that started to creep back up over the summer months. They're also likely to see vehicles return to sticker price and above (despite the little pricing progress seen over the past few months), and even if they opt to shop a non-Detroit 3 vehicle, dealers are expected to hold supply close to their chests.