United Auto Workers strike: Cost to US economy nears $8 billion
The United Auto Workers' month-long strike against Detroit's Big Three automakers continues to take a growing toll on the industry and beyond, and fresh data shows its cost to the U.S. economy is approaching nearly $8 billion.
The latest numbers from Michigan economic consulting firm Anderson Economic Group released Monday show the union's strike – now in its fifth week – against Ford, General Motors and Stellantis cost the economy $7.7 billion through the fourth full week.
AEG's breakdown shows the UAW's simultaneous, but limited, strike against the automakers has cost workers $359 million in lost wages, while the Big Three have collectively lost $3.45 billion. Dealers and customers are out a combined $1.21 billion, and suppliers have now taken at least a $2.67 billion hit.
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"We’ve entered the danger zone for many suppliers, and more than one production line," Patrick Anderson, AEG principal and CEO, said in a statement. "Without a settlement soon, a plausible restart with higher costs will likely lead to some permanent losses of production, and suppliers that will need financial assistance to return to operation."
"We’re already seeing retail sales, airline travel and income tax collections dropping in the state of Michigan. There are also increasing layoffs among vulnerable suppliers," Anderson continued. "Most of these cost are being borne by workers and by small- and medium-sized businesses, not by the Detroit 3."
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The UAW launched its strike against the Big Three on Sept. 15 beginning with one plant at each manufacturer, and has incrementally added further strike targets to pressure the automakers into bending to more concessions in contract negotiations. So far, the union has shut down six assembly plants and 38 parts depots across the country.
Around 34,000 of the 150,000 union workers employed by the Big Three are currently off the job and on picket lines, and the UAW has threatened to extend the strike nationwide if contract negotiations drag on without sufficient progress being made in addressing the union's demands. Due to the strike, the automakers have also laid off nearly 5,000 employees as of last week. If the strike continues, that number will likely grow.
Ford Executive Chair Bill Ford warned in a speech Monday that the entire U.S. auto industry is at risk if the work stoppages are prolonged, and urged the UAW to work with the company to reach an agreement and get striking workers back on the job.
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The strike has already resulted in thousands of layoffs at the automakers and their suppliers, and is the costliest auto industry strike this century.