Page updated November 7, 2019
See AEG’s latest analysis from October 25 below.
Patrick Anderson explains the implications of this strike beyond the auto industry (Detroit News editorial, 10/2/19).
Media outlets seeking the most current AEG expert analysis, interviews with Patrick Anderson and Brian Peterson, or up-to-the-minute input from our analysts should contact Lisa at 517.333.6984 or by emailing lwbooth (at) andersoneconomicgroup.com.
See our UAW Strike Methodology and Sources.
Latest AEG Clips Regarding the GM Strike
Latest Release: October 25
UAW-GM Strike Analysis, Week 6 Supplemental:
GM Contract Ratification Could Mean Thousands for Workers; Big Costs for GM
Sacrifices and Rewards Vary Significantly
East Lansing, MI, October 25, 2019—Pending final vote tallies on ratification of the proposed contract between the UAW and GM, Anderson Economic Group experts have conducted an analysis of the impact upon representative employees based on seniority, job class, and wage scale. The results illustrate that lost wages and settlement bonuses vary considerably.
For example, UAW workers will receive signing bonuses of $4,500 or $11,000, with 6 weeks of wage losses ranging between $5,280 and over $9,000. For all categories of workers:
|Six Week Wage Losses||Tentative Signing Bonus|
– – –
Sources: AEG analysis of 2015 UAW-GM Agreement and 2019 TA; UAW, GM statements;
Excludes strike pay, substitute work, and unemployment benefits.
Representative supplier lost wages presumes loss of 60% of wages during strike.
Meanwhile, the tentative contract’s immediate impact on General Motors would be significant. Anderson Economic Group’s Principal and CEO, Patrick L. Anderson, describes the payouts as substantial, with the automaker likely shouldering ratification bonus costs in excess of $485 million as follows:
|Number of GM UAW Workers||42,780|
|Number of GM UAW Temp Workers||3,220|
|– – –||– – –|
|Total Bonus Payments||$485.10 million|
Bonus Payments to Michigan Residents
|Bonus Costs to Michigan-Resident Shareholders||$58.2 million|
Anderson notes that, as shown in the table above, “Michigan residents are in line to receive nearly half of these bonus monies, with a sum approaching $238 million.” He further indicates that GM shareholders will bear much of the cost of these payouts, including Michigan-resident shareholders, who will absorb a cost of approximately $58M.
About the Estimates
Lost wages do not include strike pay, substitute work by furloughed employees, or lost earnings at dealerships. The above analysis represents conservative estimates using the consistent and documented methodology AEG has used throughout the UAW-GM strike. Bonus payouts are estimated based upon technical eligibility criteria, but actual results may vary.
Previous Release: October 23
East Lansing, MI, October 23, 2019—The UAW GM strike is in the midst of its sixth week as UAW members vote on a tentative agreement reached by negotiators last week.
Anderson Economic Group (AEG) continues to derive ongoing strike impact calculations using a consistent, documented, conservative methodology. Our updated analysis includes the following direct impacts, inclusive of data through October 27 (the end of week six):
- $1.75 billion in operating losses for GM,
- Direct wage losses for UAW GM workers and supplier workers of $989 million, and
- $485 million in potential settlement payments to UAW workers (after ratification).
These numbers do not include strike pay, substitute work by furloughed employees, or lost earnings at dealerships. Similarly, GM losses (and lost wages) due to the strike do not include proposed settlement bonuses to be paid after ratification.
*$989 million in direct wage losses includes $533 million in supplier losses and $456 million lost for UAW workers.
Previous Release: October 16
Anderson Economic Group Analysis for UAW/GM Strike Week Number 5:
Lost Wages Exceed $835 million as GM Lost Profits Top $1.5B
East Lansing, MI, October 16, 2019—The UAW GM strike rolls on through week five with mounting impacts upon GM, striking workers, state and local governments, and the employees and businesses that rely upon GM’s operations for their livelihood. Analysts at Anderson Economic Group (AEG) today released the following updated impact estimates that include data through October 20:
- $1.5 billion in lost profits for GM,
- Direct wage losses for all employees in excess of $835 million,
- $313 million in lost federal income and payroll tax revenue on wages alone, and
- $18.5 million in lost Michigan income tax revenue on wages alone.
The calculations above do not take into account strike pay, substitute work by furloughed employees, lost earnings at dealerships, or reductions in government expenditures. They were derived using a consistent, documented, conservative methodology.
In the shadow of such losses, AEG’s CEO and Principal Patrick Anderson yesterday appealed to members of Michigan’s congressional delegation to consider the possibility that elements of the Taft-Hartley Act may need to be invoked in coming days. In the letter sent to Representatives Upton and Dingell, Mr. Anderson notes that the costs for this strike far surpass those associated with the events that precipitated the Act’s last use during the West Coast’s 2002 port shutdown, and concludes:
The Taft-Hartley Act was intended to apply only when a strike or work stoppage would ‘imperil the national health or safety,’ and it appropriately sets a high bar for such extraordinary intervention into the bargaining of private parties. Given this high bar, I am writing to ask you to consider whether an appeal to the President may be warranted in the next several days.
The following pages include charts demonstrating the extent of the economic damage suffered as a result of the ongoing strike.
Charted calculations follow:
For print quality versions of these images, please contact Lisa Booth, lwbooth (at) AndersonEconomicGroup.com.