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With 12,700 US auto workers now on the picket line, the UAW may have enough funds to sustain those striking workers for nearly a year. That would be a much longer action than any UAW strike preceding it. This suggests that a stepping-up of the union’s ongoing strike is likely if they cannot soon find common ground with Detroit’s Big Three Automakers. More plants, in addition to the three already slammed by work stoppages, could be shut down by the UAW as soon as Friday. While a slowdown in auto manufacturing itself does not pose a major threat to the US economy, a resulting drop in new car sales could carry greater implications.

The cohort of Ford, GM, and Chrysler (now owned by Stellantis) has been accused of handing out meagre pay hikes for their workers while executives have received pay boosts of 40% since the union last negotiated their contracts with the Big Three in 2019. Share repurchases and other shareholder benefits have also been cited as evidence that the firms can pay up for workers. The reality is, however, that US manufacturing productivity, especially within vehicle production, has been stagnant or in decline for years while labor costs have continued to surge.

Related Stocks: Ford Motor Company (F), General Motors Company (GM), Stellantis N.V. (STLA)

The United Auto Workers (UAW) union strike, which began on September 15 with 12,700 of Detroit’s Big Three automakers’ 146,000 workers taking to the picket line, threatens to become even more widespread by Friday. Though Ford, General Motors (GM), and Chrysler parent Stellantis are countering work stoppages by laying off thousands of workers and draining inventories, the UAW entered the dispute with $825 million in its strike fund to help workers make do without pay should they walk off the job.

The Washington Post notes that full-time employees at the Big Three make an average of $18 to $32 per hour, or $720 to $1,280 per week. This puts a rough estimate of the UAW’s weekly expenditure of strike pay somewhere between $9.1 million and $16.2 million at its current scale. That means the UAW purse could sustain payments to striking workers for nearly than 51 weeks (356 days) – immensely longer than the most protracted UAW strike in US history at just over 16 weeks (113 days) back in the 1940s. That glut of cash suggests that the UAW has…

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