As tensions rise in the stagnant labor talks between auto workers and automakers, a new report shows that not only would a strike against the “Big Three” automakers create a $5.6 billion economic hit, the impact of a strike could hit customers and local automakers sooner than usual. That's because vehicle inventory levels are at record lows due to continuing pandemic-era production and supply chain issues.

If the 143,000 United Auto Workers (UAW) employees who work at Ford (F), General Motors (GM), and Stellantis (STLA) strike for 10 days, it will create $5.6 billion in economic losses, according to a report from the Anderson Economic Group.

The report comes as the 澳洲幸运5官方开奖结果体彩网:auto workers union and 澳洲幸运5官方开奖结果体彩网:Big Three automakers are in talks for a new labor contract, which is renewed every four years. With less than a month before the contracts expire on Sept. 14, union leaders have warned that talks have slowed and begun scheduling procedural votes that can set the stage for a strike.

UAW leadership has warned that its workers are prepared to go on strike, and the report concluded that a strike of 10-days against all three of the automakers would cost workers $859 million in lost wages, while the manufacturers would take a $989 million hit. The total impact of those losses would amount to $3.51 million once 澳洲幸运5官方开奖结果体彩网:other economic factors arꦓe calculated. 

But as the report details, the losses don't end with lost wages and sales, with the study also considering losses from suppliers, auto dealers, and consumers, adding another $2.1 billion in losses over a 10-day strike.

The report also examined what could happen if only one automaker suffered an auto 澳洲幸运5官方开奖结果体彩网:worker strike. For Ford, the study found that a 10-day UAW strike would cost workers $341 million in wages, create $325 million in losses for the company, and total $1.5 billion in losses𝐆. 

Impact Largely 🍰Felt in Mich🌠igan and Nearby States

While economic i𒊎m✨pact from a strike could extend nationwide, its most severe effects will be in Michigan, where the automakers make their Detroit home, and nearby neighboring states.

“These three companies produce just over half of all their U.S. vehicle output, 40% of all U.S. engine plant output, and 75% of all U.S. transmission plant output in Illinois, Indiana, and Michigan,” the 澳洲幸运5官方开奖结果体彩网:Federal Reserve Bank of Chicago, which includes the three states in its district, said in a report on the contract negotiations.

Analysts at the Anderson Economic Group could look back to the 2019 auto worker strike at GM for some insight into how aꦚ strike would impact automakers. The strike that lasted six weeks involved 48,000 workers at more than 50 plants. 

“When the UAW went on strike against GM in 2019, Michigan experienced a single quarter recession,” said Patrick Anderson, principaꦆl and CEO of th൲e Anderson Economic Group. 

🍃Inventories Could Make a Strike’s Impact Fel🎉t More Widely

During past strikes, inventory levels at dealerships were large enough to help insulate dealers and consumers from the early effects of a strike. But with vehicle inventory levels at record lows due to production and supply chain issues held over from the pandemic, even a short-duration strike of 10 days could reach cust𒁏omerꦑs, the report noted. 

Current vehicle inventories reached 162,000 units in June, only about one-fifth of the 649,000 units available for sale during the September 2019 UAW strike. 🃏

“Consumer and dealer losses are typically somewhat insulated in the event of a very short strike,” said Tyler Theile, the group’s vice president. “However, with current inventories hovering around only 55 days, the industry looks different than it did during 澳洲幸运5官方开奖结果体彩网:the last UAW strike.”