On the United Auto Workers picket line Friday morning at General Motors’ Hamtramck Assembly Plant, Karlton Byas, 63, of Detroit, a veteran safety trainer at the factory, admitted the lack of paychecks is starting to hurt him and other strikers.
“We haven’t received anything, so I’m getting by on past savings,” Byas said. “We’re not going out to eat. We’re not making any plans for any trips. We cut the air conditioner off, we’re not cutting the heat on. We’re eating out of the freezer now.”
Giving up dining out and putting vacations on hold reflect the rising costs of the UAW strike against GM.
The strike enters its third week Monday after talks went late Sunday evening.
“The parties worked all weekend addressing the complex issues before them but have not reached a tentative agreement yet,” the UAW said late Sunday. “Negotiations will resume first thing Monday morning, and we will continue to look for solutions to reach an agreement.”
While estimates of the cost to strikers, to GM and its supplier firms and to the U.S. economy as a whole vary widely, everyone agrees that the total mounts day by day and even hour by hour.
Karlton Byas, a picket line captain for the UAW, was picketing Friday, Sept. 27, 2019 outside General Motors’ Hamtramck Assembly Plant during the UAW strike.
An analysis released Thursday by East Lansing-based consultant Anderson Economic Group estimated that GM had lost profits of $113 million so far and was now losing money at the rate of $25 million a day.
Then, too, striking UAW members and workers laid off at GM’s supplier network have lost wages totaling $266 million so far, the analysis said. That translates into an estimated $68 million in lost federal income and payroll taxes.
Other analysts have pegged the cost even higher, suggesting GM could be losing money at twice the rate suggested by the Anderson analysis. But nobody knows for sure.
UAW strikers may have felt the losses more acutely at the end of last week because Friday would have been a payday had they still been inside the plants instead of outside picketing. And with the first UAW checks for strike pay of $250 per week coming soon but not yet in hand, the reality of missing a regular paycheck was sinking in.
“A lot of folks are going to need relief real soon because today’s the first day everybody’s going to see zeroes,” Byas said of the lost payday Friday. “It’s probably kind of like a gut punch right now. But some things you have to stand up for, and that means sacrifice.”
“No one is saying, ‘I want to go back in,’ ” he said. “It’s more like they want to get it settled. We all want a fair contract. We’re working in a very profitable industry and we want our employer to share with us. … We’ve been loyal, and we just expect the company to do something reasonable when it’s all said and done. Sometimes things take time.”
Retailers feeling pinch
Besides the lost profits for GM and supplier firms and the foregone wages for workers, the strike is also taking a toll nationally. Money normally spent by autoworkers and firms isn’t getting spent at everything from grocery stores to car dealers, putting a drag on the nation’s output.
How big that drag is remains difficult to calculate. But like the pain to workers like Byas, it is certain to grow the longer the strike lasts
Could GM come out ahead?
Among the many reasons why calculating the cost of the strike is difficult is that the ultimate cost depends on what kind of contract agreement the two sides reach.
Former labor negotiator for Fiat Chrysler Automobiles Colin Lightbody suggested to the Free Press a few days ago that GM might save $500 million in future labor costs if it can wrest the kind of settlement it wants from the UAW.
That type of settlement might be unlikely, for it would entail getting workers to agree to increase what they pay for health care coverage to 15% from the current 3% and also to dramatically increase the percentage of temporary (and lower paid) workers. The UAW has rejected those increases.
But, if GM prevails on those increases, that sort of settlement could save GM $5 an hour in labor costs, translating into some $500 million a year – enough to possibly make up for profits lost in the first two weeks of the strike.
“That’s a lot of money, and that’s why GM is willing to hold out,” Lightbody told the Free Press.
When the strike finally ends, we may be able to better calculate the total cost to the company and its workers. But not yet.