Economic losses reach $7.7 billion as UAW strike reaches fifth week
(CBS DETROIT) - As the historic UAW strike against the Detroit automakers has entered its fifth week, economic losses from the strike have reached $7.7 billion, according to the Anderson Economic Group LLC.
The consulting group estimates the following losses through week four of the strike, which ended on Oct. 12:
- OEM Direct Wages - $359 million
- Detroit 3 Manufacturers - $3.45 billion
- Supplier Wages and Earnings - $2.67 billion
- Dealers, Customers, Other - $1.21 billion
These numbers do not include plant closures, additional strike targets, or layoffs that occurred after Oct. 12.
The figures were determined using lost wages to striking workers and other workers who were temporarily laid off or forced to decreased hours.
In addition, Big Three losses, supplier losses along with dealer, customers and other auto industry losses were used to determine the economic impact.
According to Anderson Economic Group LLC, the following were not included in lost estimates:
- unemployment benefits
- unemployment taxes
- income taxes on wages
- settlement bonuses
- reputational damage to the union or employers
The group classifies strike pay as a loss to the union and a gain to striking union members.
We've entered the danger zone for many suppliers, and more than one production line," said Anderson Group LLC. "Without a settlement soon, a plausible restart with higher costs will likely lead to some permanent losses of production, and suppliers that will need financial assistance to return to operation. "
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