What happens to the supply chain if UAW members strike?
(CBS DETROIT) – Ahead of the UAW president's Facebook Live on Wednesday, Stellantis sent an update saying they've made a second and now third counteroffer to the union since Monday.
However, earlier in the day, UAW President Shawn Fain went on national television saying that while there has been some progress, time is running out.
In an interview with ABC's Good Morning America, Fain dismissed the idea a potential strike would harm the economy as a whole.
"The price of vehicles went up 30%. In the last four years, CEO pay went up 40%. In the last four years, worker pay went up 6%. We're not the problem," Fain said.
Instead, he suggests it would affect the "Billionaire Economy" and points out disparities in wealth and income.
He argues workers deserve better compensation and working conditions. From the start of contract talks, the union is demanding a 46 percent pay raise over four years.
Speaking on CNBC's Squawk Box, Fain said they're still fighting to get to that number.
Tuesday night, Ford's CEO said they've made their most generous offer in the last 80 years but didn't give specifics.
Now, if a strike occurs, they may use a bottleneck strategy in which the union targets plants that make vital parts like engines and transmissions.
"This is going to start cascading if we have an extended strike to meeting less demand for things like steel, less demand for paint less demand for plastics. And so we'll start to see a cascade further upstream," Jason Miller, PhD, MSU Professor of Supply Chain Management, said.
Some suppliers may need to shut down or lay off workers.
This could also potentially mean seeing less inventory at the dealership, causing higher car prices, especially if the strike lasts more than a few weeks.
"Right now, auto production in the United States has adjusted for vehicle size, and quality is actually at the highest levels we've ever seen in recorded US history. And so we could see that come down. It should jump back fairly quickly, though, once we get on the other side of a strike. We saw that happen in 2019. Once the GM strike ended, we saw a nice rebound in November and December and seasonally adjusted production," Miller said.
U.S. Senator Bernie Sanders will be in town Friday to join Fain for a rally outside the UAW-Ford National Programs building that's right next to Hart Plaza.
