GM strike has already cost automaker more than $1 billion
With the strike at General Motors stretching into a fourth week, the automaker’s financial losses are piling up. GM will have lost out on $1.1 billion in income if the labor dispute continues through this weekend, Anderson Economic Group estimates in a new analysis.
The strike has shut down all of GM’s production in the U.S., while a shortage of parts has slowed its operations in Mexico and Canada. Analysts said the walkout has reduced the car maker’s 2019 production by at least 165,000 cars and trucks.
The nearly 50,000 United Automobile Workers at GM who are striking are also taking a hit — to the tune of $624 million in lost wages, according to Anderson. That is forcing employees, who get a $250 a week subsidy from the UAW, to.
The strike, the largest at GM since 2007 and one of the largest walkouts in the U.S. in years, has also cost the federal government $250 million in foregone income and payroll tax revenue, as well as the state of Michigan nearly $14 million in lost taxes.
Anderson’s estimates exclude strike pay, substitute work by furloughed workers, lost earnings at dealerships or reductions in government expenditures, the economics firm noted.
GM declined to comment on the strike’s effect on its business. A spokesperson said in an email that the automaker would provide guidance on the financial impact when the company discloses its third-quarter earnings on October 29.
“The majority of dealers, with the exception of those directly next to GM plants, are not yet feeling a pinch in their sales, having maintained reasonable inventory levels,” Cristina Benton, director of Anderson’s market and industry analysis practice area, said in a statement. “Some dealers close to the assembly plants are reporting lower than normal sales volumes. However, some parts are becoming scarce, and these shortages are delaying needed repairs.”
to end the longest strike against GM in more than a decade have in recent days focused on job security and whether the auto manufacturer would allocate more car production to its U.S. factories from overseas locations. The company late last year said it would no longer make vehicles built at four U.S. plants — moves the UAW contends violate previous agreements made with the union.
UAW Vice President Terry Dittes on Tuesday stated there was “little progress to report” in the way of guarantess on production allocation.