The United Auto Workers Union went on strike Friday after they were unable to come to a contract agreement with the Big Three automakers: General Motors, Ford and Stellantis. About 13,000 union members have been on strike since walking out of three plants — one at each company — Friday morning following the expiration of their previous contracts. The UAW is seeking a 36% pay increase over four years and improved benefits for its workers at all three companies, including shorter work weeks and the elimination of tiered pay.
Rather than striking against just one automaker, the UAW is using a form of protest called a “Stand Up Strike,” where members from various plants across multiple companies will be called to strike as needed. The union says it’s using this strategy to ensure that union leaders can increase their bargaining power as negotiations continue.
UAW President Shawn Fain said in a video message Tuesday morning that more plants will strike if no progress in contract negotiations is made by Friday.
Gabriel Ehrlich, director of the University of Michigan Research Seminar in Quantitative Economics, told The Michigan Daily the Stand Up Strike gives the union and the automakers more time to try and come to an agreement before the strike results in serious economic impacts.
“I think it’s going to take longer to see the impacts (on the economy) because it’s not a company-wide strike,” Ehrlich said. “It does give a little bit more runway to try to find agreement and make a deal before the strike begins ramping up … relative to if they had done a company-wide strike right out of the gate.”
Ehrlich predicted that at its current scope, the strike will have a similar impact as the 2019 General Motors strike, which lasted for 40 days. According to Ehrlich, the strike will likely be disruptive in the short-run, but will not have a huge long-term economic impact given that it does not last much longer than six weeks.
“It will be disruptive, but after the strike is over we should be able to get back on that pre-strike trend,” Ehrlich said. “It’s a temporary disruption, but if we have a bigger strike or a substantially longer strike, that’s where I started to get worried that it would have a larger impact on the future trajectory of the state economy even after the strike itself is over.”
Donald Grimes, Research Seminar in Quantitative Economics senior research specialist, told The Daily Washtenaw County at large — rather than just Ann Arbor — might feel a significant impact if more plants are called to strike.
“Outside of Ann Arbor, but in Washtenaw County, there’s still a very substantial motor vehicle manufacturing activity,” Grimes said. “ Over time, those plants that employ those people would probably need to lay people off so it depends (on) how long the strike lasts, and how widespread it is … We think it’ll probably take about eight weeks to get a full effect.”
As of January 2023, the University of Michigan employed 34,800 to 34,899 Washtenaw County residents in January 2023. General Motors Proving Grounds employed 5,500 to 5,999 residents.
Michigan is home to 19% of all U.S. automotive production, with Detroit being considered the “automobile capital” of the world. The automotive industry accounts for approximately 20% of employment and contributes an annual $304 billion to the state economy.
In a statement released by the Detroit Regional Chamber, president and CEO Sandy K. Baruah said the strike will likely have a major impact on the state economy due to Michigan’s reliance on automotive jobs.
“The strike by the UAW not only impacts Michigan’s signature industry, it disproportionately impacts Michigan residents, especially those in the middle class,” Baruah said. “As Michigan has the highest concentration of auto-related jobs, our state will take the lion’s share of the negative economic impact.”
In response to a request for comment from The Daily about the strike’s impact on plants in Michigan, Stellantis said the strike will have “no impact.”
Though the strike is nationwide, Ehrlich said Michigan’s economy at large — not just the automotive sector — may be hit the hardest by the strike out of all impacted states.
“Some people already are losing their normal paychecks and are getting strike pay, but that doesn’t cover a typical paycheck,” Ehrlich said. “Some people in the automotive supply chain could end up being laid off … If the strike really goes on for a prolonged period of time, you can also see economic spillovers in the sense that people who are on strike pay and aren’t getting their normal paychecks might be canceling dinners that they would normally go to (and) stop spending money in their local communities.”
One of the three striking plants is a Ford assembly plant in Wayne, Mich., where 600 non-striking workers were laid off temporarily, as they were unable to complete work without the employees on strike.
According to Law professor Dana Thompson, restaurants, stores and other businesses near striking plants will likely experience negative impacts due to a decrease in customers.
“When you’re thinking about businesses that are near the strike locations, if you have fewer people working and they’re making less money, then businesses in those areas are likely to not be patronized as much because of that,” Thompson said.
Rackham student Amir Fleischmann, former secretary of the U-M Graduate Employees’ Organization, told The Daily he feels inspired by the UAW strike, especially after participating in GEO’s strike for better pay and benefits.
“I think it’s been inspirational to me and many others within GEO to see auto workers stand up for their rights,” Fleischmann said. “(Auto workers are) facing a lot of the same issues that we were facing … I think it’s really powerful to be able to see tens of thousands of workers going on strike and standing up for their rights to work and live in dignity.”
UAW, General Motors and Ford did not respond to The Daily’s request for comment in time for publication.