The strike by the United Auto Workers, which has lasted one month so far, is not just having a huge effect on the auto industry; it’s also causing massive ripple effects throughout the rest of the U.S. economy.
New data released this week from Anderson Economic Group – an economic consulting company based in Michigan – shows that the UAW strike against the Big Three automakers in Detroit has cost the U.S. economy almost $8 billion thus far.
The strike, which started the fifth week on Monday, cost the overall economy $7.7 billion through the end of last week, Anderson Economic Group said. The strike is being conducted by the UAW against Stellantis, General Motors and Ford.
The UAW strike is happening at the same time against these companies, though on a limited basis at each. AEG broke down the economic impact of the strike, reporting that workers have lost $359 million in wages thus far. On the flip side, the automakers have lost a combined $3.45 billion.
Suppliers have lost $2.67 billion as a result of the strike, while customers and dealers have lost $1.21 billion combined.
In a statement that accompanied the release of the data, AEG’s CEO and principal, Patrick Anderson, said:
“We’ve entered the danger zone for many suppliers, and more than one production line. 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. Most of these costs are being borne by workers and by small- and medium-sized businesses, not by the Detroit 3.”
The strike began on September 15, with one plant being affected at each of the manufacturers at first. The UAW has added targets of the strike incrementally as time has worn on, hoping to pressure the companies to make more concessions during contract negotiations.
In total, the UAW has shut down 38 parts depots and six assembly plants in locations across the U.S.
The UAW has roughly 150,000 members of its union, and about 34,000 of them are on the picket lines instead of working. If the Big 3 don’t make some concessions soon, the union’s leaders said that it would extend the strike across the country to affect the companies even more.
In response to the strike, and all the money the Big 3 have lost so far, they’ve laid off almost 5,000 workers. Should the strike continue to drag on, it’s very likely that more workers will be laid off.
If the strike goes on for too long, Bill Ford, the executive chair of Ford, said that the entire auto industry in the U.S. would be at risk. He urged leaders of the union to work with them to come to an agreement and end the strike.