General Motors (GM) is estimated to lose hundreds of millions of dollars as a result of the ongoing strike by the United Auto Workers (UAW) union. While the strike has entered its second day, this has not caused Wall Street to downgrade the company.
It is estimated that about 50,000 workers from over 50 General Motors facilities, including 30 factories, went on strike. The United Auto Workers and General Motors are currently embroiled in issues such as health care, wages, and job security.
The current strike is the largest one in the U.S. since 2007, which coincidentally, was also against General Motors as well.
In a statement, UAW vice president Terry Dittes said: “We stood up for General Motors when they needed us most. Now we are standing together in unity and solidarity for our Members, their families and the communities where we work and live.”
According to Bank of America Merrill Lynch analyst John Murphy, the impact of the strike won’t be noticed by consumers for at least a week. This is when inventories for some of GM’s popular models start to decrease.
“Consumers shouldn’t notice an impact immediately, as GM dealers currently have inventory of about 83 days’ supply on hand. However, if the strike drags much beyond a week there could be some product shortages that emerge,” wrote Murphy in a note to investors last Monday.
The suppliers working with General Motors have not felt the impact of the strike yet. However, this could change the longer the strike goes on. If this happens, it can most likely affect GM’s biggest supplies like Aptiv, American Axle, Lear, and Magna.
General Motors has not made any comments regarding the impact of the strike most especially to its bottom line.
On Sunday, U.S. President Donald Trump posted a tweet as a response to the UAW’s strike against General Motors.
Trump’s tweet reads: “Here we go again with General Motors and the United Auto Workers. Get together and make a deal!”
This isn’t Trump’s first time to make any comments regarding the issue.
Back on March 18, he posted a tweet that said: “General Motors and the UAW are going to start talks in September/October. Why wait? Start them now! I want jobs to stay in the U.S.A. and want Lordstown (Ohio), in one of the best economies in our history, opened or sold to a company who will open it up fast!”
The strike pushed through last Sunday after negotiations failed on Saturday. The two sides were not able to reach a tentative agreement on Saturday night.
About 200 union leaders voted unanimously to strike against General Motors. The two parties have been negotiating since July but no deal has been made yet.
On Sunday, General Motors released a statement saying it has agreed to invest $7 billion, improve profit sharing, create 5,400 new jobs, retain nationally-leading health benefits, and more.
The statement adds: “We presented a strong offer that improves wages, benefits and grows U.S. jobs in substantive ways and it is disappointing that the UAW leadership has chosen to strike at midnight tonight. We have negotiated in good faith and with a sense of urgency. Our goal remains to build a strong future for our employees and our business.”
Despite General Motors’ offer, this is deemed as something unacceptable coming from a company that made $8 billion last year.
“We have been clear at the table about what GM members have indicated we will accept,” National Bargaining Committee Chair Ted Krumm said.
“We are standing up for what is right. We as local unions will sacrifice to stand up for what we deserve. Our members have spoken; we have taken action, and this is a decision we did not make lightly. We are committed to a strong contract at GM that recognizes our UAW members, who make some of the greatest products in the world and make GM so profitable.”
UAW’s strike against General Motors received support from some Democratic presidential candidates.
“Autoworkers deserve good wages, comprehensive benefits, and economic security. I stand with @UAW as they strike to get what they deserve, and urge GM to come to the table and negotiate in good faith,” said Elizabeth Warren.
In a tweet, Joe Biden said: “A job is about a lot more than a paycheck. It’s about dignity and respect. Proud to stand with @UAW to demand fair wages and benefits for their members. America’s workers deserve better.”