MICHauto > Blog > UAW Strike > Anderson Economic Group, LLC Reports Strike-Induced Auto Industry Losses Exceed $9.3 Billion

Anderson Economic Group, LLC Reports Strike-Induced Auto Industry Losses Exceed $9.3 Billion

October 23, 2023

Suppliers, manufacturers looking at long-term, if not permanent, damage

Anderson Economic Group, LLC
Oct. 23, 2023

Anderson Economic Group, LLC, a boutique economic consultancy based in Michigan, has calculated that the 2023 UAW strike against Detroit’s three top automakers has surpassed $9.3 billion in economic losses for the auto industry. These calculations encompass losses through the fifth full strike week, which ended at midnight on October 19.

The following losses comprise AEG’s cumulative loss estimates through the fifth week of the strike:

  • 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

These figures do not include plant closures, additional strike targets, or layoffs that took effect on or after Friday, October 19. These will be included in our loss calculations in the sixth and any successive weeks. OEM stands for Original Equipment Manufacturer, in this case referring to Ford, GM, and Stellantis.

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.

Loss estimates do not include unemployment benefits or unemployment taxes; income taxes on wages; any settlement bonuses (which are transfers from shareholders to workers and do not represent U.S. income lost); or any reputational damage to the union or the employer(s). We count strike pay as a loss to the union and a gain to striking employees.

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