As the U.S. auto industry and broader economy recover from the pandemic and semiconductor shortages, a potential United Auto Workers (UAW) strike could result in economic damage and higher inflation, Bloomberg reported.
A 10-day strike against General Motors Co. (NYSE:GM), Ford Motor Co. (NYSE:F) and Stellantis NV (NYSE:STLA) could reduce the U.S. gross domestic product by $5.6 billion, potentially pushing the Michigan economy into a recession, according to the Anderson Group, a Michigan-based economic consultancy.
Of the estimated $5.6 billion economic impact, lost worker pay would account for $859 million and lost automaker earnings would be around $989 million, according to Anderson.
The strike could also impact car model availability and prices, which had been gradually decreasing from record levels. If the UAW goes through with its threat to strike all three companies, the impact could be much wider, affecting suppliers, workers, and commodity prices, particularly steel.
UAW President Shawn Fain‘s demands include a defined-benefit pension, retiree health care, pay raises equal to 46% over four years, a 32-hour work week, reinstatement of cost-of-living allowances and the end of tiered pay. The automakers estimate these ...