Economic impact of UAW strike on Lansing could be significant, experts say

LANSING — A strike by United Auto Workers against General Motors could have a harsh impact on the Lansing-area economy, experts told the State Journal.

Shawn Fain, the bombastic president of the national UAW, has made it clear that a strike is possible and that he would not accept an extension of the current contract that expires Sept. 14. Over 97% of workers voted to authorize a strike against the companies, and Fain has said he wants agreements from the “Big Three” manufacturers — GM, Ford, and Stellantis — before the threat of a strike is lowered.

Mike Huerta, president of UAW Local 602, which represents workers at the Lansing Delta Township Assembly Plant in Delta Township, said he’s not sure whether a strike will happen, but is making sure his chapter’s workers get what they feel they’re owed.

“Not a single vehicle leaves any of these facilities without UAW membership putting them together — some of the highest quality vehicles in the world,” he said. “We make massive profits for this corporation and it's time that they show the working people the UAW the respect and dignity that they rightfully deserve.”

Huerta said he and his union members rely on media reports for information on the negotiations since his unit doesn’t have an official seat at the bargaining table. But he warned that strikes at Lansing’s two GM plants would have cascading impacts on the local economy.

Lansing Grand River Assembly, represented by UAW Local 652, has over 1,400 employees, while Lansing Delta Township Assembly has more than 2,800 workers. Local 652 President Ben Frantz did not respond to requests for an interview.

A strike would result in a lack of workers commuting to the Lansing area, impacting restaurants, gas stations and retail industries, Huerta said.

“All of this stuff — it ripples through the economy,” he said.

But Huerta emphasized that Lansing isn’t the only region that would be impacted by action from the union.

“It's not just Lansing, it's not just Detroit, it's not just Michigan, it's not just the United States — it's the world,” he said.

According to a recent report from East Lansing-based Anderson Economic Group, a 10-day strike from the UAW could cause about $5 billion in global economic losses.

Tyler Theile, vice president of Anderson Economic Group, said Lansing could be one of the most heavily impacted areas in the nation from a strike.

“The greater Lansing region, if you had to rank them, would be second or third most impacted” by a potential strike, Theile said. Southeast Michigan would likely be impacted more significantly, she said.

In Theile’s mind, a strike against at least one of the “Big Three” manufacturers is “pretty likely.”

“Fain has kind of built things up in a way that he would almost disappoint his members at this point if he doesn't either: A. give them most of what they want, or B. show a really firm hand with the (Big Three),” she said.

The newly elected UAW president has made headlines through his confrontational approach to bargaining and his hard-line support for a strike should agreements not be reached by Sept. 14.

But Theile emphasized that the impact on Lansing is largely based on which automaker, or automakers, are on the receiving end of action from the union. A strike against Ford or Stellantis would have a much smaller impact than a stoppage at the local GM facilities, she said.

UAW workers last struck in 2019 in a 40-day effort.

On Thursday, GM sent the UAW an offer in the hopes of advancing negotiations with one week to go until the contract’s expiration.

“Our offer has been developed considering everything in our environment including competitor offers and what is important to our team members,” David Barnas, senior director of news relations for GM, said in a statement. “We still have work to do, but we will continue to bargain in good faith with the UAW and work towards an outcome that recognizes the vital role of our team members in GM’s success.”

Barnas declined to comment specifically on the possibility of a strike or the economic impact on the Lansing area.

The UAW’s Fain quickly rejected GM's offer via social media.

“After refusing to bargain in good faith for the past six weeks, only after having federal labor board charges filed against them, GM has come to the table with an insulting proposal that doesn’t come close to an equitable agreement for America’s autoworkers,” he said. “GM either doesn’t care or isn’t listening when we say we need economic justice at GM by 11:59 p.m. on September 14th. The clock is ticking. Stop wasting our members’ time. Tick tock.”

The offer fell short of the UAW’s demands, which include a 40% hourly wage increase across the life of contracts and a return of a cost-of-living adjustment and pension plan.

Lansing Mayor Andy Schor expressed his support for the workers in a statement and stressed the importance of a fair agreement being reached between the sides.

“Lansing’s auto workers are the best in the world and for over 125 (years) we have been building cars right here. We are proud of our rich UAW history and I truly hope that GM and the UAW can come to an agreement quickly and a strike can be avoided, or kept very short,” he said.

“Workers certainly deserve to be compensated appropriately for their work,” he added. “So much of our local economy relies on our auto workers and suppliers so I have to remain hopeful that a deal can be struck and vehicles can keep rolling off the lines at our two GM plants.”

Regardless of the likelihood of a strike, Huerta said nobody in his union is looking forward to the prospect.

“It's hard to go home and tell the family over and over again, 'I don't know how long it's going to be, I don't know how long we're going to be out, I don't know when I'll be back to work, I don't know when I'll have a full paycheck,'” he said. “Those are tough discussions, and it gets tougher every week.”

Detroit Free Press reporter Jamie L. LaReau contributed to this report. Contact Sheldon Krause at skrause@lsj.com. Follow him on Twitter @sheldonjkrause.

This article originally appeared on Lansing State Journal: Impact of UAW strike on Lansing could be significant, experts sa