Costs for Everyone Add Up As GM Strike Continues


GM has lost profits of $113 million so far and is now losing money at the rate of at least $25 million a day.

"We haven't received anything, so I'm getting by on past savings," said Karlton Byas, 63, of Detroit, a veteran safety trainer at General Motors' Hamtramck Assembly Plant.

"We're not going out to eat. We're not making any plans for any trips. We cut the air conditioner off, we're not cutting the heat on. We're eating out of the freezer now." Byas said.

The strike enters its third week Monday after talks went late Sunday evening.

“The parties worked all weekend addressing the complex issues before them, but have not reached a tentative agreement yet,” the UAW said late Sunday. “Negotiations will resume first thing Monday morning and we will continue to look for solutions to reach an agreement.”

An analysis released Thursday by East Lansing-based consultant Anderson Economic Group estimated that GM had lost profits of $113 million so far, and was now losing money at the rate of $25 million a day. Other analysts say the cost are even higher, suggesting GM could be losing money at twice the rate suggested by the Anderson.

Striking UAW members and workers laid off at GM's supplier network have lost wages totaling $266 million so far, the analysis said. That translates into an estimated $68 million in lost federal income and payroll taxes.

"A lot of folks are going to need relief real soon because today's the first day everybody's going to see zeroes," Byas said of the lost payday Friday. "It's probably kind of like a gut punch right now. But some things you have to stand up for and that means sacrifice."

"No one is saying, 'I want to go back in,' " he said. "It's more like they want to get it settled. We all want a fair contract. We're working in a very profitable industry and we want our employer to share with us. ... We've been loyal and we just expect the company to do something reasonable when it's all said and done. Sometimes things take time."

Among the many reasons why calculating the cost of the strike is difficult is that the ultimate cost depends on what kind of contract agreement the two sides reach. 

Former labor negotiator for Fiat Chrysler Automobiles Colin Lightbody suggested if GM prevails on their demands, that sort of settlement could save $5 an hour in labor costs, translating into some $500 million a year.

"That’s a lot of money and that’s why GM is willing to hold out," Lightbody told the Free Press.

All that's certain at the moment is that the cost is accumulating every day that workers like Byas are outside on the picket line instead of inside at work.

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Economics, Finance and Investing