Ford, GM, Stellantis Lay Off 5,000 Workers; UAW 'Stand-Up Strike' May Be Minimizing Damage

The Big Three have laid off nearly 5,000 workers since the start of the historic United Auto Workers (UAW) strike against Ford (F), General Motors (GM), and Stellantis (STLA), although layoffs could have been larger, if not for the union's stand-up strike strategy, experts estimate.

Ford laid off 1,865 workers between the start of the strike on Sept. 15 and Monday. Similarly, GM reported laying off about 2,330 workers due to the “negative ripple effects” of the UAW strike. There were 640 laid-off employees at Stellantis as of Monday. The Chrysler parent company made 300 additional layoffs in September but said those employees went back to work Monday.

The union’s stand-up strike strategy leads to certain workers walking out of specific locations chosen by the UAW rather than all stopping work at once, allowing the union to target specific locations and automakers.

Most recently, the UAW didn't expand the scope of its strike on Oct. 6, as it did in past weeks, citing progress in negotiations. However, the union also didn't call off the approximately 25,000 workers already called on to strike. 

In its first three weeks alone, the UAW strike has resulted in an estimated $579 million in direct wages lost, according to Anderson Economic Group (AEG), a business consulting firm based in Michigan. The estimated wages lost include those for striking and laid-off workers as well as for workers who “have been assigned reduced hours or otherwise had wages reduced, rather than laid off entirely,” Patrick Anderson, AEG principal and CEO, said.

Although Ford claims that "strike-related layoffs are an unfortunate result of the UAW’s strategy," the union's stand-up strike could be reducing layoffs compared with traditional strikes in which all union members walk out at once, according to some experts.

The University of Michigan-Ann Arbor Department of Economics estimated in an analysis that a four-week-long strike involving all UAW members would result in about 50,000 job losses at each of the Big Three automakers, much greater than the nearly 5,000 layoffs that have taken place as the strike nears the end of its fourth week.

Instead, because of the UAW's stand-up plan, what could be a "draconian impact is going to be relatively limited," Marick Masters, a professor of business at Wayne State University who has studied the history of UAW collective bargaining with the Big Three, told Investopedia.

While the UAW is "hoping to get through [the strike] with minimal damage," the costs for the union members, layoffs and otherwise, could swell, Masters said, saying that "effects of strikes usually accumulate" over time.