The United Auto Workers and the three big U.S. car companies are trying to hash out new contract agreements by Thursday, with up to 146,000 workers set to walk out if they can’t come to terms by then.
, when the median employee’s pay rose 16.1%. Data for Stellantis is unavailable because the company was formed only in 2021 and is now headquartered in Amsterdam, where pay disclosure rules are different from those in the U.S.could cost the Big Three automakers at least $5 billionThe immediate impact would be halted production. IHS analysts estimate that for every week workers are on strike, GM’s output would fall by 55,000 vehicles a week and Ford’s by about 65,000 a week.
GM and Ford stand to lose $2.5 billion and $3 billion in revenue, respectively, for every week a strike lasts, Goldman Sachs Equity Research estimated. By comparison, agreeing to a 40% wage bump for UAW members would cost GM $4 billion to $5 billion and Ford $5 billion to $6 billion over four years. Goldman didn’t provide estimates for Stellantis.
The UAW has amassed $825 million in a strike fund that would pay eligible members $500 a week during a work stoppage, a sum that is expected to last for up to around 11 weeks but could be depleted sooner because of health care costs.If fewer new cars are produced, inventory on dealer lots would dwindle, which could push prices higher.
Following the pandemic and a global supply chain crunch in materials and parts, U.S. new-vehicle inventory levels are still tighter this year than they were during the last round of bargaining, in 2019. Cox Automotive estimated the supply of new vehicles at the end of July as enough to cover 56 days of sales — below the 60-day mark considered “normal” and the 66-day measureThe impact could be more muted for Ford and Stellantis brands like Jeep, Dodge, Chrysler and Ram, which Cox said had above-average levels of supply. But GM brands like Cadillac and Chevrolet have slightly below-average supplies.In 2019, autoworkers at GM went on a 40-day strike that cost the company an estimated $3.
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