GM Layoffs Continue as Auto Workers Strike Persists
Key Takeaways
- GM and Ford are laying off about 500 more employees
- This is yet another round of layoffs since the strike began
- GM is citing the expansion of the strike for Friday’s layoff of 164 workers
The auto workers strike has made headlines for weeks as workers at Ford, General Motors, and Stellantis (owner of Jeep and Chrysler) hold the picket line. The United Auto Workers (UAW) is asking for wage increases, union representation at new electric battery plants, and the end of a tiered employment system — among other demands.
Now, the automakers are laying off employees and citing economic losses as the reason.
What will the strike and layoffs mean for these automakers and the economy more broadly? We’ll explain.
State of the (auto) union
The big update today is that GM is laying off 164 workers at plants in Ohio and Indiana. This after laying off more than 1,800 workers at an assembly plant in Kansas and New York state. That brings the total number of recent layoffs at the company to just under 2,000.
It’s worth noting that Ford has also laid off about 900 employees since the strike began.
In a statement, GM said: “We have said repeatedly that nobody wins in a strike, and this is yet another demonstration of that fact. We will continue to bargain in good faith with the union to reach an agreement as quickly as possible.”
The UAW reiterated its earlier statement regarding layoffs: “Let’s be clear: if the Big Three decide to lay people off who aren’t on strike, that’s them trying to put the squeeze on our members to settle for less. With their record profits, they don’t have to lay off a single employee,” the statement said. “Their plan won’t work. The UAW will make sure any worker laid off in the Big Three’s latest attack will not go without an income.”
The UAW is paying about $500 per week in benefits to the workers on strike. That adds up to about $14.3 million per week for the union, but it started the strike with $825 million in its fund for exactly this purpose.
The economic impact
The strike resulted in $3.95 billion in economic losses in its first two weeks in September, according to a report from consulting firm Anderson Economic Group: $1.12 billion in losses for the Detroit manufacturers, $1.29 billion in supplier losses, and $1.2 billion in dealer and customer losses.
General Motors, specifically, said the strike cost the company $200 million in that same initial two week period. No one can say for sure how long the strike will last. For some context, The UAW struck GM in 2019 for 40 days.
Today, GM stock is down 3.64%.
The bottom line
We’ll just have to see how long the strike lasts. It might drag on long enough to impact car buyers in terms of inventory and prices, but for now, it’s mostly the automakers themselves that are feeling the squeeze. For its part, Wall Street isn’t a fan of the uncertainty, and none of the Big Three automakers are doing that well.
