Anderson Economic Group, LLC
Oct. 23, 2023
- Wages of OEM Workers – $488 million
- OEM Losses – $4.18 billion
- Supplier Wages and Earnings – $2.78 billion
- Dealers, Customers, Other Industry Losses – $1.86 billion
Damage Accumulating; Permanent Losses and Indefinite Postponing of Investments
AEG’s Patrick Anderson noted that “The cost of this strike is now double that of the 2019 UAW strike against General Motors, with significant layoffs among supplier firms. Lost wages of striking workers and those laid off because of the strike are nearing a half billion dollars.” Anderson went on to recall the firm’s warning two weeks ago that the cost of the strike would force manufacturers to postpone or cancel investments. “We’ve now seen GM, Ford, and Stellantis announce such actions. Many more are likely if the strike continues.”Estimating Economic Losses
To determine the ongoing economic impact of the UAW “stand-up” strikes, AEG estimates aggregate losses that include:- Lost wages to workers, including striking workers and others temporarily laid off or forced to decrease work hours. AEG estimates cover both workers at manufacturers that are strike targets and workers employed by impacted suppliers. Lost wages include lost cash compensation and lost health care benefits.
- Lost earnings for the Big Three auto manufacturers. AEG estimates company losses based on both lost production and costs of maintaining idle facilities.
- Supplier losses. AEG estimates losses caused by delays or cancellations of orders for parts and services among tier I, II, and III suppliers. These losses include lost wages of laid off workers, and lost income to contractors, managers, and owners of supplier companies.
- Dealer, customer, and other auto industry losses. AEG estimates losses to automotive dealers, repair shops and customers from foregone repairs, and indefinite delays in new vehicles. We also include a small allowance for losses to workers providing services to idled facilities and their workers.