GM Strike: How it affected various industries

October 31, 2019
Atanas Nikolov

History knows events, which cause such ripples that we feel them years, if not decades into the future. It seems like, with the rise of technology and the progress of society, such monumental impacts become even likelier. In other words, even a little wave has the potential of causing a tsunami.

The GM strike is officially over. The company has missed out on $2.9 billion in profits due to the event. This is a tremendous amount of money, which cannot be simply waved away. The more important thing here though is that we have likely not seen the end of it.

Ford, for instance, has also met the scrutiny of the United Automobile Workers. Although a tentative deal has been reached in a much quicker manner, this only goes to show how important the GM strike was. However, I would like us to turn our gaze to a slightly different place. I think we should explore how such an event affects not only its immediate industry but a whole slew of other niches as well!

The strike they could not simply dismiss

First, let me point out that that this was no ordinary strike. If you have been out of the loop, you may have missed how huge it actually was. It was the longest auto strike on a national level in the past 50 years. The losses surpassed third-party projection two-fold. So, let us cover it briefly.

In September 2019 UAW and GM Motors had to reach an agreement on a new 4-year contract. However, they could not agree on its terms, resulting in a strike that lasted almost a month and a half. What was the fuss about, though?

It is no secret that American automakers are not doing that well. Because of that, in 2018, GM stated that it wanted to lay off thousands of workers, among other restructuring plans. Naturally, a lot of people felt uneasy about the upcoming reduction in the workforce (supposedly about 15% of the company). This led UAW to have quite a different perspective when negotiating over the new contract.

On top of that, the whole thing snowballed even further. UAW wanted GM to not only keep as many jobs as possible but to also increase their salaried workers. Additionally, they required better salaries and improved benefits. Through many twists and turns, GM had to ultimately cave in and give an adequate offer. Now come the real questions – who won and what did we learn?

The aftermath of the GM strike

What do you assume when you hear that the parties reached an agreement? Most people think that means everything goes well for the workers at least. Why would they end the strike if it were otherwise? As it turns out, that is not the case (and rarely is, on such occasions).

See, the strike was not a clear success. However, it showed other companies that workers are still not afraid to stand their ground. Make no mistake – a strike hurts the workers as well because they lose on wages. So staying committed even in the face of a possible bad outcome is quite the bravery.

I tell you all of that because there is one thing you need to notice. UAW is not just about car manufacturers. The union has members across the entire automotive sector, along with truck drivers and car carriers. In fact, for every GM job up to 7 other jobs are generated. Such industries could have suffered a major disruption and most of us would not have noticed it. Let me explain!

How one strike affects many industries

When the strike began, unionized auto haulers decided to honor the strike and not ship GM vehicles. Unionized truck drivers, in turn, would not pick up GM parts. Of course, such solidarity is to be expected. However, GM understandably stated that they would simply find non-union contractors for such tasks.

This may seem insignificant but is actually huge. It means the whole US shipping infrastructure could have gone through tremendous changes, because of a seemingly unrelated strike. As a company that provides car shipping services, this hits close to home.

And what about the subcontractors, which produce components for GM’s plants? Entire businesses could have faced bankruptcy or at least major losses. Some actually have to deal with them now.

Even people in a completely different niche felt the strike’s impact. The workers of the plant have to eat somewhere, so the businesses responsible for that suffered too. The local economy also faced a challenge, with workers not receiving wages they could then spend within it. This actually leads me to the most important point – no one is safe from the strike’s effects.

Why the GM strike ultimately affects everyone

In light of the examples above, it should be obvious how interconnected everything is. However, we know that most people never see it like that. Most of us go about our lives as if nothing ever affects us. So what if 49 thousand workers are on strike? After all, the US population is more than 300 million. Hardly a majority problem, right? Sadly, no, not right at all.

See, when people tell you to care about such events, they always use clichés. “Someday it may happen to your industry”, they say. Or “we have to care about our fellow citizens”. Of course, these are right, but they also miss the point. It is not simply that “it might happen to you”. It actually happens to you right now. Even if you look at this whole thing selfishly, it still affects you personally.

The strike of 50 thousand people could easily end up rippling all the way to you. Its effects can range from your next car being more expensive to actually having worse job security from now on. Or maybe in some weird turn of events your entire local economy takes a hit. There is no way to predict every outcome.

Because of the above, every one of us should understand how valuable all gears in the economy are. Do not turn a blind eye next time something so big happens. It will get to you in one way or another. This is not karma, just basic economic principles of a deeply related society.

What do you think about the strike?

How do you see this strike? Have you felt its effects already, or has it gone over your head completely? To be entirely honest, I think many of us would simply fail to notice it. Not because it will not affect us, but will we simply not trace the ripples back to where it all started.

Of course, it is possible that we are all blowing that completely out of proportion. Though if we can learn anything from the Europeans with some of the issues they have to face, it is humility. Let us not dismiss any small changes, because they may end up becoming a huge burden after all.

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