Analysis: Detroit’s Strikes Become An Industrial ‘Survivor’ game

Originally reported by Reuters.com

DETROIT, Oct 3 (Reuters) – The United Auto Workers head into the 19th day of strikes with a bold strategy that places the Detroit Three automakers into a high-stakes game of “Survivor” with a weekly decision on which factories the strike will hit next, with layoffs mounting, suppliers hurting and harsh rhetoric from both sides.

UAW President Shawn Fain has transformed the rituals of contract talks with General Motors(GM.N), Ford(F.N) and Chrysler parent Stellantis (STLAM.MI) into a high-stakes, made-for-media game. The automakers will look for clues on how to survive in the agreement the union reached on Sunday with Volvo Group-owned (VOLVb.ST) Mack Trucks.

For now, the union appears to be in control, although there is pain on both sides. GM and Ford said Monday they were indefinitely laying off another 500 workers at four Midwestern plants, citing the impact of the walkouts.

Analysts looking ahead to third-quarter financial results this month are starting to reckon the costs of what the UAW calls “Stand up strikes.” JP Morgan estimated GM has lost $191 million in operating profit, and Ford $145 million during the quarter.

Those are large sums, but not in the context of GM or Ford, which have forecast combined pre-tax profits of up to $26 billion for this year with little going to employees.

The daily cost of the strikes is almost certain to rise weekly, JP Morgan added. The real pain will start if the UAW orders walkouts at factories that build Ford, Chevrolet and Ram pickup trucks and large SUVs such GM’s Cadillac Escalade.

At the current pace, it could take the UAW weeks to get to those factories.