Possible UAW strike could be felt far and wide
FOX 26 Business Reporter Tom Zizka has more on what it could mean for factory workers and consumers.
HOUSTON - The deadline for a United Auto Workers strike against the big three U.S. automakers is quickly approaching. While negotiations continue toward the September 14 deadline, a financial disruption could be felt across the country.
The first place consumers will feel it is in car lots, new and used, as a strike would deplete fresh inventory and drive up prices for pre-owned vehicles, just as those numbers have been trending down. The longer a strike lasts, the hundreds of thousands of suppliers who support the manufacture of all those vehicles, and the myriad people who work for them, could also fall on hard times.
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University of Houston supply-chain professor Margaret Kidd says a significant chunk of the economy could be affected if autoworkers hit the picket line, "this could be extremely disruptive."
She notes the auto industry accounts for more than 3% of the country's GDP, and is just recovering from pandemic-related slowdowns and disruptions. The financial hit of a walkout could be disastrous, as North American auto production would lose an estimated 150,000 vehicles a week.
"Even if it's a short strike, we've seen estimates saying a 10-day strike could cause $5 billion," says Mike Martinez of Automotive News. "That's really an unfathomable amount of money."
That's just automaker losses. The effect would soon trickle-down to suppliers, their employees, and everywhere they spend money.
"You have a lot of suppliers involved, and the smaller ones are just not going to be able to hold up without any revenues coming in, if there is a prolonged strike," says Kidd.
In the past, the UAW has selected 'one' of the automakers as a strike target during negotiations. This time, the union says members could walk-out on any automaker who doesn't agree to a deal by the deadline. Demands include a 46% pay raise over four years, and a 32-hour work week that they say can come from billions worth of healthy profits. Agreement could be a tall order, leaving those affected with little recourse.
"It's not like you're going to find a substitute client, if you have three major automakers closed down for a period of time," says Kidd.
The last UAW strike was against General Motors in 2019. It lasted 40 days and cost the company $3.6 billion in lost revenue.
If there's another walkout, losses could be significantly larger, leaving foreign manufacturers, and their ready supply of inventory, winners.
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September 12, 2023 at 06:19AM
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Potential UAW strike could be felt far beyond car factories, picket lines - FOX 26 Houston
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