{"id":59627,"date":"2023-09-11T13:24:29","date_gmt":"2023-09-11T17:24:29","guid":{"rendered":"https:\/\/ifintechworld.com\/uncategorized\/impact-of-possible-strikes-on-detroit-three-automakers\/"},"modified":"2023-09-11T13:24:32","modified_gmt":"2023-09-11T17:24:32","slug":"impact-of-possible-strikes-on-detroit-three-automakers","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=59627","title":{"rendered":"Impact of possible strikes on Detroit Three automakers"},"content":{"rendered":"
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\n<\/u>3\/3<\/span><\/p>\n

\u00a9 Reuters. FILE PHOTO: The new GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan, U.S., March 16, 2021. REUTERS\/Rebecca Cook\/File Photo<\/span>
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\n2\/3<\/span><\/u>\n<\/div>\n

(This Sept. 8 story has been corrected to remove a reference to IHS Markit forecast on stoppages in paragraph 7))<\/p>\n

(Reuters) – A union representing workers at General Motors (NYSE:), Ford Motor (NYSE:) and Jeep-maker Stellantis (NYSE:) has threatened strikes if a contract deal is not reached before the current ones expire on Sept. 14 at midnight.<\/p>\n

A strike would ground production to a halt, costing billions of dollars in losses for automakers as well as their suppliers. With the deadline approaching, here’s a look at some key facts about the possible strikes and their costs:<\/p>\n

UAW VS. DETROIT THREE<\/p>\n

The United Auto Workers (UAW) union said on Aug. 25 that 97% of its nearly 150,000 members voted in favor of authorizing a strike at the Detroit Three automakers if agreements over wages and pension plans were not reached before the current four-year contracts expired.<\/p>\n

PAST STRIKES <\/p>\n

The UAW went on a 42-day strike against GM in 2019 before reaching a new contract, the longest walkout since a 28-day strike at Ford in 1976. UAW workers have struck work for two days at GM and for one day at Chrysler in 2007. <\/p>\n

Prior to 1976, strikes were frequently used as a bargaining tool at Detroit Three. UAW workers went on a strike at GM for 113 days in 1945, according to data compiled by Kristin Dzizcek, an adviser to the Chicago Federal Reserve.<\/p>\n

STRIKE POSSIBILITY<\/p>\n

A survey of 99 investors by Morgan Stanley found that 82% were expecting a strike, while 58% believed that a stoppage was “extremely likely.” A significant percentage also anticipate any UAW contract talks could cause wage inflation in the range of 20%-40% over the next four-year period. <\/p>\n

STRIKE IMPACT <\/p>\n

The Detroit Three automakers account for about 40% of U.S. new light vehicle sales by units, according to J.P. Morgan.<\/p>\n

A month-long strike at the three automakers could cut output by as many as 500,000 vehicles, Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions, said in a newsletter. About 1.3 million light vehicles were sold in the United States in August, according to Wards Intelligence data.<\/p>\n

ECONOMIC HIT<\/p>\n

The automotive industry has historically contributed 3%-3.5% to the U.S. GDP. As of 2020, it accounted for nearly a 7% share of manufacturing value-added in the U.S. economy, research by Deloitte showed. <\/p>\n

In terms of employment, the auto manufacturing sector accounts for 9.7 million jobs, or about 5% of U.S. private-sector employment, according to data from the Alliance for Automotive Innovation.<\/p>\n

STRIKE TOLL<\/p>\n

Ten-day strikes at all three automakers could cost manufacturers, workers, suppliers and dealers more than $5 billion, according to economic consulting firm Anderson Economic Group. <\/p>\n

A week long strike at Ford could impact earnings by $550 million, whereas a similar action could shave off $480 million from GM’s earnings and $400 million from Stellantis’ profit, according to Deutsche Bank Research analysts.<\/p>\n

PAST COSTS<\/p>\n

GM recorded a $3.6 billion pre-tax loss in 2019 after UAW members went on a strike for 42 days before a new deal with the company was reached. The stoppage cost the workers nearly $1 billion in lost wages, Anderson estimated. <\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

3\/3 \u00a9 Reuters. FILE PHOTO: The new GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan, U.S., March 16, 2021. REUTERS\/Rebecca Cook\/File Photo 2\/3 (This Sept. 8 story has been corrected to remove a reference to IHS Markit forecast on stoppages in paragraph 7)) (Reuters) – A union representing […]<\/p>\n","protected":false},"author":1,"featured_media":3401,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[1],"tags":[83],"class_list":["post-59627","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-uncategorized","tag-featured","post_format-post-format-video"],"yoast_head":"\nImpact of possible strikes on Detroit Three automakers | iFintechWorld<\/title>\n<meta name=\"description\" content=\"3\/3 \u00a9 Reuters. 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