GM strikes impact on the Midwestern economy

The strike by US GM workers will cause the economy in the Midwest to fall into recession. According to Reuters reported on the 19th, GM’s strikes on about 48,000 hourly workers in factories across the United States have lasted for three days. The negotiations on the contract between the two parties lasted from Wednesday morning to the evening, but the two sides could not reach an agreement soon. As the largest automaker in the United States, GM has 103,000 employees in the United States by 2018, of which 50,000 are hourly workers.

After GM said that the medical insurance costs of strike workers were passed on to the United Auto Union, the Democratic Party members in the US Congress increased their criticism of GM and urged GM to reach an agreement with workers. Rep. Okasio Kotz said that GM’s move was “pure barbarism”. “General Motors workers are asking for a raise when the company’s profits hit a record, but GM executives cut workers’ health care,” she said.

According to CNN on the 18th, the strike of nearly 50,000 GM workers is only the beginning. The strike may soon lead to the unemployment of hundreds of thousands of people, and may even lead to the decline of large areas in the central and western regions.

Companies affected by strikes are not limited to General Motors. The company said that more than 10,000 US companies that provide products and services such as seats, tires, brake pads, windshields and chips will also be affected. Related companies throughout the United States, many concentrated in the Midwest of the United States, and some have been discontinued or will soon be discontinued.

The Michigan Think Tank Automotive Research Center estimates that there are three to four equipment manufacturers supporting the company behind every hour of GM’s work. “The impact will start soon, the factory is beginning to close down, and the impact will begin to be magnified several times,” said Dezzek, vice president of industry labor and economic affairs at the think tank. In addition, the impact is not limited to GM suppliers. A GM spokesperson said, “Our suppliers usually have their own suppliers.” For example, its engine suppliers must also purchase steel and aluminum for the manufacture of related components.

In the Midwestern towns of most of GM’s plants, businesses such as local restaurants and retailers that rely on GM employees and supplier employees will also suffer. Economists predict that one week after the strike begins, the damage will affect the entire supply chain, and the number of unemployed people in related industries may reach 300,000. If the strike lasts for several months, states such as Michigan, Ohio, and Indiana will fall into recession later this year or early next year.

The above-mentioned regions have already felt the pressure of trade disputes between the United States and China and its allies. Economists said that the Midwestern United States is at the forefront of the trade war, large areas of agriculture have fallen into recession, and the loss of mortgage farm redemption is increasing, and manufacturing is not far from this dilemma. Many factors have led to a recession, and GM’s strike is one of them.

In addition to the United States, General Motors was also affected by strikes in other regional factories. General Motors confirmed on Wednesday that it temporarily laid off 1,200 people in Oshawa, Canada.