Hicks: Effects of strike could be felt beyond UAW workers
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThe United Auto Workers strike against the Big Three automakers is now in its second week, and the impact is already been felt in Indiana, as Stellantis announced last week it is laying off 300 workers in Kokomo as a result of the strike.
Mike Hicks, director of the Center for Business and Economic Research at Ball State University, says if the strike continues, the effects will be felt by more than just the union autoworkers.
In an interview on Inside INdiana Business with Gerry Dick, Hicks said the impact will be acute in the places that have a lot of UAW members, but also among the suppliers supporting the automakers.
“I think the potential statewide is for more like 60,000 workers, and then follow on jobs if you’re running a bar restaurant, outside a union shop that that’s going to affect you as well,” Hicks said. “So, we’re not feeling it yet, but I think as this progresses into week, four or five, six, if it does, I think you’ll start feeling some real pain in those places.”
On Friday, the UAW announced it had expanded the strike to nearly 40 General Motors and Stellantis parts distribution centers in 20 states, though Indiana was not among them.
Hicks said starting the strike with a relatively small number of workers, about 13,000, and ramping things up slowly has been a key tactic for the union.
“I think that’s really a smart financial move,” he said. “Otherwise, I don’t think the UAW could afford a very lengthy strike. This way, I think they’re going to be able to.”
The union is pointing to the companies’ huge recent profits as it seeks wage increases of 36% over four years. The companies have offered a little over half that amount. The UAW has other demands, including a 32-hour work week for 40 hours of pay and a restoration of traditional pension plans for newer workers.
The companies say they can’t afford to meet the union’s demands because they need to invest profits in a costly transition from gas-powered cars to electric vehicles.
Hicks said that transition has been a key sticking point, particularly as the automakers look to keep the price point of their EVs as low as possible by cutting costs.
“Electric vehicles just require about a third as many parts as a traditional [internal combustion] engine. So, that’s 30,000 for a typical car today [and] 10,000 [for] electric vehicles,” he said. “The demand for those UAW workers, not at the assembly plant, but at the parts manufacturers, they’re going to be just a lot less.”
Bargaining continued Thursday, although neither side reported any breakthroughs, and they remained far apart on wage increases.
The Associated Press contributed to this report.