The United Auto Workers, the union that represents nearly 150,000 workers at Ford, General Motors and Stellantis, is moving ever closer to a strike.
The threat of a strike comes after GM and Ford reported record profits last year and workers demanded their fair share.
Their demands include: a wage increase of about 40%, a four-day week, health care for retirees, cost of living increases and the elimination of a two-tier wage structure that keeps wages lower for new workers. Some of those demands would undo concessions made during the 2008 financial crisis to control costs when the federal government stepped in to bail out automakers.
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“The companies want to say that if we strike we will ruin the economy – we will ruin their economy, the economy that only works for the billionaire class, not the working class,” Marick Masters said. an economics professor at Wayne State University.
Economists say a strike would have a significant impact on the U.S. economy – particularly the economy in the Midwest, where auto factories are concentrated.
Automakers account for 3% of America’s gross domestic product, while the Big 3 in Detroit account for about half of the total U.S. auto market.
According to the Anderson Economic Group, a 10-day strike would cost the economy an estimated $5 billion. Not to mention the impact on the Big 3. In 2019, a 40-day strike cost GM alone $3.6 billion.
What impact will this have on consumers? At the end of August, the Big 3 collectively had about 70 days of inventory. Analysts at AutoForecast Solutions say a three-week strike would clear inventory, lead to higher prices and encourage buyers to buy foreign brands.
While a strike would be a drag on the economy, auto workers say they have no choice but to fight for their livelihood. For their part, the Big 3 companies say the UAW’s demands are simply too expensive.
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