Looming auto workers strike could cost $5 billion in just 10 days, new analysis says

DETROIT – If the United Auto Workers union decides to strike against Detroit’s Big Three automakers when current labor contracts expire next month, the economic effect would quickly tally into the billions, according to a report released Thursday.

A work stoppage by nearly 150,000 UAW workers at General Motors, Ford Motor and Stellantis would result in an economic loss of more than $5 billion after 10 days, according to Anderson Economic Group, a Michigan-based consulting firm that closely tracks such events.

AEG estimates the total economic loss by calculating potential losses to UAW workers, the manufacturers and to the auto industry more broadly if the sides cannot reach tentative agreements before the current contracts expire at 11:59 p.m. ET on Sept. 14.

“Consumer and dealer losses are typically somewhat insulated in the event of a very short strike,” said Tyler Theile, vice president at AEG. “However, with current inventories hovering around only 55 days, the industry looks different than it did during the last UAW strike.”

During the last round of bargaining in 2019, a breakdown in negotiations between the Detroit automakers and the UAW led to a national 40-day strike against GM. The automaker said the strike cost it about $3.6 billion that year in earnings.

In past negotiating periods, the UAW has selected a lead company of the Big Three and targeted initial collective bargaining efforts, including the threat of striking, there. But the new union leadership, already more aggressive than in recent history, hasn’t promised to limit such efforts to one automaker, leaving all three more vulnerable.

“This is a different year than 2019,” AEG CEO Patrick Anderson said Thursday during a webinar with the Automotive Press Association. “It’s a different environment now.”

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