Report Estimates $4 Billion in Losses as Impact Spreads

The United Auto Workers (UAW) strike has caused losses across the auto industry in the first two weeks after the union called off its work stoppage in protest against the “Big Three” American automakers, according to a report released Monday $4 billion caused.

Economic consulting firm Anderson Economic Group (AEG) estimates that the UAW’s “insurrectionary strike,” which began on September 15, resulted in direct losses of approximately $1.2 billion for Ford, General Motors (GM) and Stellantis. The work stoppage also resulted in $325 million in direct lost wages, $1.29 billion in losses at suppliers and $1.2 billion in losses at auto dealers and customers.

AEG’s assessment does not take into account the new strike locations announced Friday, when another 7,000 UAW workers joined picket lines at a Ford plant in Chicago, Illinois, and a GM plant in Lansing, Michigan. In total, more than 25,000 union members are on strike in 21 states, representing about 17 percent of UAW membership.

“Suppliers were hit particularly hard by the UAW’s strategy of announcing strikes at certain plants just hours before they were due to close,” AEG CEO Patrick Anderson said in a statement accompanying Monday’s report. “The closure of 38 parts distribution centers also impacted dealer service operations and, of course, resulted in even more UAW workers losing their wages.”

Looking ahead, AEG predicts the third week of the strike will be “significantly more costly for Ford,” which was spared when the UAW expanded its targets on Sept. 22. However, the new targets added Friday will likely result in Ford dealers and customers “losing out” on some of the company’s most profitable vehicles, including the Ford Explorer and Lincoln Aviator, the report read.

“As innocent bystanders begin to feel it, it will impact the overall supportive sentiment that Americans have expressed so far during the strike toward the UAW’s demands,” Anderson added.

According to a survey by the group Navigator research, most Americans support the UAW strike. In a survey of about 1,000 registered voters from Sept. 21 to 25, 78 percent of respondents said they viewed the walkouts favorably, compared with 22 percent who said they did not support the strike.

GM and Ford announced Monday that the companies are laying off more workers as a result of the strike. According to a report by Reuters, Ford is laying off a total of 330 workers at its plants in Chicago and Lima, Ohio, while GM is laying off 170 employees at its plants in Parma, Ohio, and Marion, Indiana.

Previously, GM laid off about 2,000 workers at an assembly plant in Fairfax, Kansas, citing a “shortage of critical stampings” because workers at another plant in Wentzville, Missouri, went on strike, according to CNBC reported. That same week, Stellantis laid off 370 workers at factories in Ohio and Indiana.

During a press conference on Friday, Ford warned that hundreds of thousands of jobs could be at risk due to the auto industry’s “fragile supply chain.” A Ford spokesman said this Newsweek via email Monday that the company’s focus “remains on working diligently with the UAW to reach an agreement that rewards our workforce and allows Ford to invest in a vibrant and growing future.”

In a statement on Detroit Free Press On Monday, UAW President Shawn Fain said: “The decision to lay off workers is not a ‘ripple effect,’ but rather a decision by the company to pressure our members into accepting a weak contract,” Fain said. “GM owns it, and GM owns the fact that it took them over a month to respond to our suggestions and it took them over another month to make serious progress.”

The union’s demands on automakers include wage increases, cost-of-living adjustments and a four-day week.

Newsweek emailed the UAW and the GM and Stellantis press teams seeking comment Monday evening.