With less than two hours left before the 11:59 p.m. ET deadline for the United Auto Workers and the Big 3 U.S. automakers to reach a tentative agreement, union president Sean Fine called for the union’s three divisions to prepare for a midnight strike.
“If we don’t reach a tentative agreement in the next two hours, we’re calling tonight for three divisions to strike at midnight,” Fine said in a video update. Shared on Facebook.
Union members will be striking “all three of the Big 3 at the same time” and “for the first time in their history,” Fine said, adding that they would go on a “standstill” strike.
In a statement Thursday night, Ford Motor Co. said the UAW’s counterproposal, received Thursday evening, “shows little movement from the union’s initial demands submitted on Aug. 3.”
“The union made it clear that it plans to strike at 11:59 p.m. Eastern if the union does not agree to its unsustainable conditions,” the company said in the statement. could have far-reaching consequences for our business and economy.
The automaker says it is absolutely committed to reaching an agreement that “rewards employees” and protects Ford’s ability to invest in its future during the transition.
A possible strike at the Big 3 US automakers, General Motors, Ford and Stellandis, would threaten the livelihoods of 143,000 workers and threaten the bottom lines of some of the nation’s leading companies.
However, the economic fallout may extend beyond the immediate players involved. Businesses can lose out on the costs of striking auto workers. Auto parts suppliers may be shut down. Consumers may decide to stop at higher prices.
The six-week strike will cost the U.S. two-tenths of a percentage point off economic growth in the three months ending in December, Moody’s Analytics chief economist Mark Jandy told ABC News.
“It’s a small impact, but meaningful,” Zandi added, noting that a potential strike would weaken the U.S. economy, which faces other threats such as higher oil prices, a federal government shutdown and a moratorium on student loan payments. .
As the weeks pass and automakers are already depleted by inventory due to a pandemic-era supply disruption, car prices could rise, threatening the Federal Reserve’s efforts to reduce inflation, Jandi said.
A brief strike against the three automakers, if it lasted 10 days, would cost the U.S. economy another $5.6 billion, according to a report released last month. Andersen Economic Group.
These losses include about $860 million in direct wages foregone by auto workers and nearly $1 billion in lost production — both of which would be exacerbated by lost economic activity as a result, the report said. Consumers and dealers could lose another $2 billion as car owners delay repairs and dealers lose inventory, the report added.
Economists told ABC News that tens of thousands of members of the United Autoworkers, or UAW, would have the most significant economic impact as a result of lost wages.
“The lost wages directly affect every family of a UAW worker on strike and their spending power in the economy,” Tyler Theil, vice president and director of public policy at the Andersen Economic Group, told ABC News.
“Whatever their spending power is today, it will be significantly different tomorrow,” Thiel added. “That’s where the economic impact starts to ripple through the economy.”
Employees participating in the strike will receive strike pay of $500 per week, which for many workers is less than half of their previous earnings. Such workers are less likely to eat at a restaurant or go to a movie theater, reducing revenue for those businesses, Gabriel Ehrlich, an economic forecaster at the University of Michigan, told ABC News.
“Those things add up,” Ehrlich said.
Eric Gordon, a business professor at the University of Michigan, told ABC News that if the strike lasts several weeks, workers at companies in the supply chain could be affected by the same movement because of lost productivity and reduced income.
Initially, suppliers of car parts such as dashboards and sound systems may retain workers in the hope that a surge in activity will be needed as automakers build up lost inventory to quickly resolve the strike, Gordon said. Over time, a backup in the supply of such components will trigger a slowdown in production.
“Those suppliers will close shifts first, and then production can stop all together,” Gordon said.
A four-week strike against the three automakers could cost 161,000 jobs in Michigan alone. Report By Ehrlich. Ehrlich found that a prolonged strike would result in more than 300,000 job losses in the state.
In addition to workers and related businesses, consumers could also be affected as inventory declines at automakers lead to higher prices.
Due to the lingering effects of pandemic-era supply chain disruption, Thiel said the Big 3 automakers held about a fifth of the inventory they did in 2019, with the 40-day strike against General Motors having little impact.
Gordon said supply shortages caused by the strike could lead to higher sticker prices.
“For consumers, it’s a terrible time to go out and buy a car,” he said. “If you need to buy a car, one thing’s for sure: You’re not going to get a great deal.”
The White House confirmed Thursday evening that President Joe Biden spoke with UAW President Sean Fine and leaders of major auto companies to discuss the status of negotiations.
Biden made the calls as the clock continues to tick down on a possible strike.
