UAW Strike is costliest auto industry labor dispute this century after three weeks of negotiations

The current standoff between the UAW and Ford, General Motors, and Stellantis has become the costliest of any auto industry strike since 2000, surpassing the contract negotiations between the union and GM that led to a strike in 2019.

An economic assessment of the strike against Detroit automakers, now in its third week with tens of thousands of employees off the line, finds the labor dispute has cost the industry $5.5 billion.

That includes $579 million in lost wages for workers and $2.6 billion in losses for automakers.

The analysis comes with East Lansing-based Anderson Economic Group, which found the latest strike exceeded the UAW's dispute with GM in 2019, which lasted several weeks and led to $4 billion in losses.

The firm's CEO said this week the third week of the strike was more costly than the first two weeks due to the expanded strike hitting major plants in Chicago and near Lansing. It also noted the ripple effects were starting to impact further down the supply chain.

"The stress suppliers are under has become acute, with more than 30% reporting that layoffs have already begun," said Patrick Anderson. 

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Anderson Economic Group broke down the losses into four categories:

  • Direct wage losses: $579 million
  • Detroit 3 Manufacturer losses: $2.68 billion
  • Supplier losses: $1.6 billion
  • Dealer and Customer losses: $1.26 billion

Had the UAW called on expanded strikes last Friday, the economic impacts still wouldn't have been included in the current forecast. However, since President Shawn Fain announced no new plants that the UAW would target, the economic hits won't be as severe.

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One of the sources for information the AEG uses came from the Motor and Equipment Manufacturers Association, which surveyed its members and found 30% had already done some form of layoffs. If the strike continues as it has already, that figure could double by mid-October.