Strike by UAW would cost GM, the union and its members

Ian Thibodeau
The Detroit News

A strike by the United Auto Workers could cost General Motors Co. more than $1 million per hour at each plant that's idled, and send as many as 46,000 hourly workers to picket lines. That's what the company and workers are facing as the clock ticks down to a contract expiration after 11:59 p.m. Saturday.

A strike would be costly for the company, the UAW and for workers.

A strike at a single plant in the U.S. costs carmakers an average of $1.3 million per hour, according to the Ann Arbor-based Center for Automotive Research.

While GM would hemorrhage millions, workers would feel it in their pocketbooks with strike pay of only $250 per week for those who show up to picket. The UAW strike fund totaled more than $721 million at the end of 2018, but a widespread walkout across GM's 35 plants across the Midwest, Texas and New York would draw that down quickly.

Instead of widespread strikes, the union more typically has opted to stage walkouts at a limited number of facilities, referred to as "bottleneck" strikes. Such targeted strikes tend to focus on disrupting supply chains, and often hit engine or transmission plants. Those disruptions amplify through the supply chain, and a strike at a single plant can disrupt production at several other facilities due to shortages of crucial components.

Walkouts at plants that assemble popular, high-margin trucks and SUVs would also be felt. Flint Assembly and Fort Wayne Assembly build GM's full-size pickups, and work stoppages there would hit the bottom line, though it could take a while. 

The Detroit automaker has more than 11 weeks' supply of its profit-heavy trucks and SUVs at dealerships, according to Cox Automotive.

GM spokesman David Barnas said the automaker has  "an appropriate amount to meet our sales and marketing objectives." 

An extended walkout would dent that supply.

“If it’s a day strike or a week strike, it’s not a big deal; they can always come back and make up the production,” said Michelle Krebs, an analyst at Cox Automotive. “If it’s more lengthy than that, then yes, they would have a problem.”

A strike would be a chance for embattled UAW President Gary Jones to rally a membership weary from a years-long federal investigation into corruption and embezzlement at the highest levels of the union.

On Thursday, The Detroit News reported that UAW President Gary Jones and former President Dennis Williams are the unnamed union officials accused in a criminal case of helping orchestrate a years-long conspiracy that involved embezzling member dues. That same day, UAW Region 5 Director Vance Pearson, a former top aide to Jones, was indicted for embezzling union funds, mail and wire fraud, money laundering and conspiracy charges.

"The likelihood of a strike stays high even with this new news," said Kristin Dziczek, vice president of industry, labor and economics at Ann Arbor's Center for Automotive Research. "And the union might see it as flexing a greater amount of their power to take everybody out."

The last time auto workers went on strike was for 17 hours in 2007 at GM, idling 80 facilities and affecting 73,000 workers. Prior to that in 1998, 9,200 workers walked off the job at two parts plants in Flint, shutting down production for 54 days and causing sales to sink.

Some UAW members say they've been saving their money to hold them over in the event of a strike.

"We have cut back on a lot of bills," said Jeremy Ladd, 43, an assembly line worker at Fort Wayne Assembly. "We are prepared for an extended period. I am sure that not everybody was able to do that."

UAW locals have been posting picket assignments at union halls. Members say they're prepared to do what's necessary to get the best contract, but strikes make the negotiations more tense for both sides.

Said Dziczek: "It's a risky strategy."

Twitter: @Ian_Thibodeau

Breana Noble and Kalea Hall contributed.