An update on the possible United Auto Workers and how it could impact the economy

Published: Sep. 13, 2023 at 6:31 PM EDT
Email This Link
Share on Pinterest
Share on LinkedIn

FORT WAYNE, Ind. (WPTA) - Negotiations between the United Auto Workers and the three big automakers, General Motors, Ford, and Stellantis, have stalled. The deadline to make a deal is Thursday, Sept. 14 at 11:59 p.m. If a deal is not reached, workers could go on strike.

BACKGROUND: Local UAW members overwhelmingly vote in favor of strike

We spoke with representatives at the UAW Local 2209, who told us they don’t expect to be targeted to strike.

“It’s still uncertain how the strategies gonna work and the uncertainties about it is difficult for us to explain to our members because there’s a very good chance we’re not going to go out on strike, says UAW bargaining chairman Rich LeTourneau.

One of the factors is how long the strike would last.

“Let’s hope they don’t strike,” John Kessler said. “It’s not in anybody’s best interest to let this roll on for an extended period of time.”

RELATED: Supply shortage causes weeklong closure of Fort Wayne GM plant

John Kessler is the director of the Center for Economic Education and a professor at Purdue University Fort Wayne.

He says with General Motors being the second largest employer in Allen County, anything affecting work at the plant will impact the local economy.

The more extended and lengthier the strike, the more damage that gets caused,” Kessler said. “The estimate is something like $500 million-a-day impact on the U.S. economy.”

Kessler says the effect will spread to other local businesses that support GM’s assembly line, eventually impacting retailers, restaurants, and local businesses that could see a decrease in spending. That was the case in 2019 when the last auto strike lasted 40 days.

But what happens if UAW gets everything they are asking for in this new contract? Kessler says the 40 percent increase in wages and reinstatement of a retirement petition could bankrupt the company.

“There’s a potential here to kind of shoot yourself in the foot because you could decrease the announcement of cars being purchased because you raised the price of the cars because you raised labor costs,” Kessler said.

Economists are watching the next 36 hours closely. If auto workers go on strike, it wouldn’t send the U.S. economy into a recession, but it could lead to more delays and shortages of vehicles.