As this newsletter goes to pixel, General Motors Co. is in the second week of a nationwide strike that has seen some 46,000 employees down tools.
GM and the United Auto Workers failed to reach an agreement before their previous four-year contract expired Sept. 14. The myriad challenges facing the automotive industry, combined with the company's previously announced plans to shut four plants and slash its headcount in North America meant a new deal was never going to be easy.
But the negotiations have been complicated by the ongoing federal investigation into corruption at the union, which has seen 11 representatives or former representatives charged so far. Marick Masters, business professor and director of labor at Wayne State University, suggested that this has led to a breach of trust between workers and their union bosses, making talks even more fraught.
The strike, GM's first in more than a decade, has divided onlookers. Analysts at Citigroup estimate the walkout is costing the carmaker $100 million per day, whereas Credit Suisse puts the figure at $50 million. Moody's automotive analyst Bruce Clark suggests GM's inventory and cash reserves will allow it to weather a strike no longer than one or two weeks, while Argus Research analyst Bill Selesky thinks it could run as long as four weeks.
The reason for the uncertainty is the unique set of circumstances around this particular strike. Autotrader Executive Analyst Michelle Krebs said: "The circumstances [of the strike] are unlike any we've seen before, with the industry headed for a downturn and a transformation and the UAW leadership under the cloud of a corruption investigation."
How and when this costly affair ends is anyone's guess.
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GM could lose up to $100M per day from UAW strike, experts say
General Motors workers went on strike after the automaker and United Auto Workers failed to reach an agreement before their contract expired.
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Potential Forever 21 buyout involves mall landlords Simon, Brookfield
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Food, Beverage & Tobacco
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Juul faces subpoena threat from Congress over company documents
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S&P 500 Consumer Discretionary and Staples Indices
Consumer Edge is a weekly collection of critical developments across the automotive; retail; and food, beverage, and tobacco industries. Drawing on exclusive analysis and value-added content from the Consumer News team at S&P Global Market Intelligence, it is published every Thursday.