UAW strike aftermath: Car prices may increase due to Big Three losses
FARMINGTON HILLS, Mich. (FOX 2) - The Big Three are still feeling the aftermath of the six-week United Auto Workers strike, and soon car buyers might too.
"GM says the price of its cars is going up by over $500," said John McElroy, an automotive analyst. "Ford is saying nearly 1000 bucks."
McElroy predicts that Stellantis will also reveal an increase in car prices in January.
The historic strike cost the industry at least $10.4 billion, according to an assessment by the Anderson Economic Group.
Does that mean the average consumer has to pay for it?
"Ideally, you just raise the prices of your cars, but you got to compete in the marketplace," McElroy said. "What if your non-union competitors do not raise their prices? You’re not going to be able to raise your prices and stay competitive."
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"It’s not the flip of a switch," said John Walsh, the president of Michigan Manufacturer’s Association. "It takes time to wind down, it takes time to wind back up."
McElroy added the car companies have already announced they’re going to cut back on future investments to help offset the costs of the contracts.
"They’re delaying new models coming out," he said. "They’re shrinking the size of battery plants to make up for this cost, they’re going to find other savings, they’re probably going to go after their suppliers."
The profits of the auto companies took a hit – with GM losing $1.1 billion, Ford losing $1.7 billion, and Stellantis experiencing a loss likely somewhere in the middle.
"The numbers don’t surprise me even though we’re talking about billions of dollars here," McElroy said. "Billions that the company lost because of the strike and billions more that these new contracts are going to cost them."
However, despite the decline in profits, McElroy suggests that there might not be a significant impact on profit sharing for workers.
"If the profits are down a few hundred million dollars, that really doesn’t affect the profit-sharing checks all that much."
That’s because, on average, for every billion dollars in profits, the workers receive approximately $1,000 in profit sharing.