This week nearly 50,000 United Auto Workers walked out of General Motors plants across the country in the first national UAW strike against GM since 2007. The strike officially surpassed the length of the 2007 strike on Wednesday. Now, everyone outside of the negotiating room in Detroit is left scratching their heads on what the potential cost of this strike could be. WKAR politics reporter Abigail Censky joined WKAR’s Karel Vega to speak about the potential impact of a lingering strike on the local economy in a GM town. Below are highlights from the conversation.
Forecasting The Ripple Effect
“Less than a month, probably, we limp along. If it goes for months and months,and in fact, the big strike right after the second world war lasted for about four months, that would that would really take a big bite out of our economy.”
Charley Ballard is a Professor of Economics at Michigan State University. He said, while there is a myriad of guesses from auto industry analysts, no one really knows how much GM is losing per day. And, it’s impossible to quantify how much a strike will impact the local economy without knowing the duration. In 2007, GM lost $ 23 million when 73,000 UAW employees walked out.
This strike, 49,000 UAW members have walked out of GM plants across the country and Wednesday this strike outlasted the 2007 strike, which lasted two days.
Ballard also noted that GM’s presence in Lansing has steadily declined since previous strikes, making the impending ripple effects into the local economy demonstrably lesser than what they would have been 40 years ago. Presently GM employees over 4,000 people at its two Lansing area plants. Now, the Lansing Economic Area Partnership lists GM as the fourth largest employer in Lansing under the State Government, Michigan State University and Sparrow Health System.
Suppliers Help GM ‘Divide And Conquer,’ Says Local 602
“We may not have the effect financially as when we had 20,000 people working for GM in Lansing. Now there's only 4,000. So, we don't have the clout that we used to have, but it's still...I say 4,000 but that may be 20,000 still when you add in all the suppliers. So, there's a lot of people making less money [who] have less money to spend.”
Steve Delaney is an electrician at Delta Assembly. He’s also the Vice President of UAW Local 602. Delaney said GM’s reliance on suppliers is akin to their reliance on the tiered wage system and reliance on temporary workers that UAW members are striking about. As the auto industry has changed, jobs that were formerly internal to GM have become external and are staffed by regional and international suppliers. LEAP estimates that there are over 6,500 workers in the Lansing supplier economy.
Kristin Dziczek, Vice President of the Center for Automotive Research, said “on a national basis, every one job in an auto assembly plant has three or four supplier jobs associated with it.”
These suppliers are beginning to be affected by the strike, with some reports that they have temporarily laid off employees. However, many of the regional suppliers have not returned calls for comment. And, responses vary on a case by case basis depending on how diversified local suppliers portfolios are and what preparations local suppliers made.
Follow Abigail on Twitter: @AbigailCensky