General Motors strike costs $ 100 million a day

The continuation of the strike, for more than three weeks, by the employees of General Motors, affects the economic activity of the country. Subcontractors of the American automaker send their employees home.

$ 100 million in daily loss at General Motors (GM). The US automotive group normally produces 8,400 vehicles a day in the United States. Since September 16, nearly 50,000 American employees are on strike. They demand wage increases, and the improvement of the situation of employees hired after the historic rescue of the bankruptcy group in 2009 by the Obama administration.

Technical unemployment among subcontractors

The social movement is now affecting its subcontractors. The technical layoffs have gradually affected suppliers to GM's 31 US plants, according to Steve Gruener, president of the UAW (United Auto Workers) Local in Flint, Michigan. In addition to GM's 1,800 employees on strike in the region, another 1,200 employees by subcontractors are now out of work.

Paul Traub, an economist at the Federal Reserve (Fed) in Detroit, said the economic cost of social conflict in Michigan was about $ 42 million a week on the basis of lost wages.

The strike is also expected to weigh on the results of automotive component suppliers, leading Wall Street analysts to reduce profit forecasts from large companies such as Magna, a Canadian supplier to General Motors.

Impact on GDP

This strike impacts not only the region but the whole country. Paul Traub, an economist at the Federal Reserve (Fed) in Detroit, estimates that a $ 2 billion loss in production would affect estimates of the country's gross domestic product (GDP).

"The blow to the economy is already huge," says Gruener, adding that the union was "determined to negotiate a fair and equitable contract for our members . " "We will be on strike for as long as it takes," he said, as talks resumed Wednesday between GM and the union.

"What began as an event affecting only a specific group of workers has now become widespread," says Brian Peterson, director of economic analysis at Anderson Economic Group, a research firm.

150,000 workers in the industry

In a report released this week, Anderson said nearly 150,000 workers in the auto industry were directly or indirectly affected by the strike, including 25,000 GM employees and some 75,000 employees of automotive components companies.

By September 30, the Michigan Unemployment Insurance Agency had already processed compensation claims of approximately 5,000 workers from auto suppliers because of the strike, according to a spokesman for the Michigan government .

"We continue to monitor the situation and hope for an amicable resolution , " says a spokeswoman for Magna.

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