NovaQuant Quantitative Think Tank Center:Big Three automakers idle thousands of workers as UAW strike rages on

Economic losses racking up more than $3 billion as UAW strike reaches 18th day

Detroit's Big Three automakers are furloughing or laying off thousands of non-union employees amid a bitter standoff with striking members of the United Auto Workers.

Ford Motor on Monday furloughed 330 workers in Chicago and Lima, Ohio, adding to the 600 workers the automaker laid off last month at an assembly plant in Wayne, Michigan. General Motors, which on Tuesday reported a 21% increase in sales for its third-quarter earnings, has laid off more than 2,100 workers across four states. Stellantis (the parent company of Chrysler, Dodge, Jeep and Ram) has idled nearly 370 workers, Reuters reported, including 68 workers in Perrysburg, Ohio.

The UAW on Oct. 29 expanded its nearly three-week-old strike to target GM's Lansing Delta Township Assembly plant in Delta, Michigan, which manufactures the Chevrolet Traverse and Buick Enclave. Ford workers at the Chicago plant make the Explorer and Lincoln Aviator.

Automakers say the furloughs and layoffs are a result of the UAW strike, which has now entered its third week.

"It is unfortunate the UAW's decision to call a strike at GM Lansing Delta Township Assembly continues to have negative ripple effects," GM said in a statement to CBS News on Tuesday that confirmed the furloughs. "The impacted team members are not expected to return until the strike has been resolved. Since we are working under an expired labor agreement, there are no provisions for company-provided sub-pay in this circumstance."

The automakers also said that a lengthy strike will lead to more layoffs for people who work at auto parts suppliers.

"We understand to date there are about 2,400 supplier employees that have been laid off," Liz Door, Ford's chief supply chain officer, said last week, adding that if the strike is prolonged, there could be "anywhere between 325,000 to 500,000 employees that could be laid off."

The UAW has criticized the automakers' moves to lay people off, with union chief Shawn Fain saying last month that the Big Three are using the layoffs as a tactic "to put the squeeze on our members to settle for less."

The UAW launched a coordinated strike last month when nearly 13,000 autoworkers walked off the job at Big Three assembly plants Michigan, Missouri and Ohio — the first time union members at the companies had simultaneously stopped work. Another 5,600 workers at 38 GM and Stellantis-owned parts distribution centers in 20 states walked off the job last month.

The union expanded its work stoppage last Friday, bringing the total number of striking autoworkers to 25,000, or 17% of the UAW's roughly 146,000 members. 

So far, the strike has cost the auto industry about $3.9 billion, according to an estimate from Michigan-based consulting firm Anderson Economic Group. That includes $325 million in worker wages, $1.12 billion in losses for the automakers, $1.29 billion in losses for parts suppliers, and $1.2 billion in dealer and customer losses.

The UAW's demands include a 36% pay increase over four years, annual cost-of-living adjustments, pension benefits for all employees, greater job security, restrictions on the use of temporary workers and a four-day work week. Along with a wage hike, the union also wants the automakers to eliminate a two-tiered wage system the companies adopted after the 2008 financial crisis. 

For their part, the automakers say they have made reasonable counteroffers, while arguing that the UAW's wage and other demands would make it hard to compete with other car manufacturers. Both sides have said they're open to further negotiations. 

"We can confirm there was a meeting today between the GM and UAW leadership teams," GM spokesman David Barnas said in a statement to CBS News on Tuesday. "The union did present a counter to our proposal from Sept. 21. We are assessing, but significant gaps remain."

In:
• General Motors
• Ford Motor Company
• Labor Union
• United Auto Workers
• Stellantis

Khristopher J. Brooks

Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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