Analyst Estimates Supplier Losses Outpace UAW Worker Losses In Third Week Of Strike

Oct 1, 2019

The United Auto Workers strike against General Motors entered its third week Monday.  It’s estimated that GM has lost more than $135 million over the course of the strike. But the businesses that supply GM are also losing millions. WKAR’s politics reporter Abigail Censky spoke with Patrick Anderson, CEO of the Anderson Economic Group, about how much he estimates suppliers are losing. Below are highlights of their conversation.

Interview Highlights

More Than Two Players

 “Well there’s GM and then there’s the UAW. In fact, the majority of people don’t work for GM or any of the major automakers they work for dealers, they work for suppliers, part assemblers, repair, electricians, pipefitters."

Anderson said people often think of the two biggest players in a strike, namely the auto company and the UAW, yet the suppliers and peripheral industry account for more jobs.

GM is the fourth largest employer in the Lansing region. They create over 4,000 jobs. But the Lansing Economic Area Partnership estimates there are more than 6,500 supplier jobs.

Nine companies around Lansing supply GM. They include Dakkota Integrated Systems, Bridgewater Interiors, and Magna Dexsys. Together they account for more total Lansing area jobs than GM.

Suppliers Losses Outpace UAW Workers

“But their mortgage needs to get paid just as much as everybody else's. So, we do need to think about the suppliers. And in our estimate, starting in the third week now we think suppliers are actually losing more wages than the UAW workers.”

According to Anderson’s most recent estimates, the UAW workers and suppliers have lost more than $266 million. And, even if the strike is resolved, they stand to lose more this week since they’ve lost production for the week. 

Last week alone, Anderson estimated supplier workers around the country lost nearly $11 million per workday. And, that has a big effect on GM towns, like Lansing, with a regional network of suppliers supporting local GM locations.

Possibility Of A Recession Looms In Michigan

 “Places like Lansing, East Lansing, Delta township, Oakland County with the Orion Assembly Plant, Detroit, Hamtramck. I mean if you’ve got that many GM workers and suppliers, you’re going to feel it. And nowhere is the concentration like Michigan. And it means white collar, new collar, blue collar every kind of collar is affected by this and I am very concerned about Michigan going into a one state recession.”

Anderson said Southeast and Mid-Michigan will receive the worst economic ripple because of the sheer number of GM plants and suppliers concentrated in the region.

He added, counting the suppliers, there are more people in Southeast Michigan who are losing wages that did not vote for a strike than those who did.

None of the nine Lansing area suppliers responded to request for comment on how this is affecting their workforce. But, with more than 6,000 supplier jobs and 4,000 GM jobs the longer the strike goes on, the more perilous it becomes for Lansing’s economy.

Follow Abigail on Twitter: @AbigailCensky