United Auto Workers are striking against Detroit’s Big Three automakers at the same time for the first time. The impact could be financially devastating. Economists estimate 10 days on the picket lines against General Motors, Ford and Fiat Chrysler-parent Stellantis could cost the U.S. economy $5.6 billion and push Michigan into a recession.
Strikes can financially strap companies, workers and the overall economy. Here are some of the costliest strikes in history in this week’s Five For Friday:
5: UPS, 1997
In 1997, the U.S. shipping landscape had one major player. UPS delivered around 80% of ground packages throughout the country. So when 185,000 UPS workers went on strike for 15 days over pensions, wages and part-time status, it cost the company roughly $800 million. USPS and FedEx had limited market share at the time and it was impossible to fill the void.
Since then, e-commerce has exploded with the likes of Amazon, shipping anything and everything to your home. When UPS workers contemplated another strike this summer, economists estimated that a 10-day strike would cost the U.S. economy $7.1 billion.
4: MLB, 1994-95
Professional baseball is no stranger to labor disputes, and MLB’s season-ending strike of 1994 cost owners around $580 million, while players lost $230 million in salaries. It also spelled the end for the short-lived Baseball Network, which lost $595 million in revenue after the cancellation of nearly 950 regular season games, along with the playoffs and World Series.
The fight over a salary cap in baseball — which never came to fruition — took a toll on goodwill with fans. It took more than a decade for per-game attendance to return to pre-strike levels.
3: Southern California Supermarkets, 2003-2004
In the fall of 2003, 70,000 supermarket workers in southern California went on strike against four major chains in the region. The United Food and Commercial Workers Union claimed Albertsons, Vons, Pavilions and Ralph’s were trying to reduce benefits to compete with Walmart.
The strike lasted four months and cost the chains between $1.5 billion to $2 billion. The dispute left the striking workers without $300 million in wages. The two sides eventually came to terms, but Ralph’s had to part with an additional $70 million in penalties for illegally re-hiring locked-out workers under fake names.
2: General Motors, 2019
The last time UAW went on strike was a 40-day walkout against General Motors in 2019. That’s when 48,000 workers hit the picket line for job security and better wages. The automaker said it cost the company $3.6 billion in earnings for the year. Many suppliers down the line also lost revenue and the price of steel fell considerably due to a lack of production with 34 plants at a standstill.
1: Hollywood Writers and Actors
Most production in Hollywood is currently shut down with writers and actors on strike since May and July, respectively. Both are concerned about being replaced by artificial intelligence and compensation for streaming rights.
Analysts say the strike could cost the economy more than $5 billion or $150 million per week. Television and films are a $134 billion industry in the U.S. so the costs keep piling up with no end to the strike in sight.
We’ve seen a number of high profile strikes in the history of Tinsel town. Check out this Five For Friday on it.
