Former Chrysler CEO says UAW strike has 'broad and deep tentacles' in the economy
Economic impact of UAW strikes estimated to cost $400 to 500 million per week
UAW strike has 'broad and deep tentacles' that will impact US economy: Bob Nardelli
Former Chrysler and Home Depot CEO Bob Nardelli explains why he thinks the UAW strikes will 'go on for a while.'
As the United Auto Workers’ (UAW) picket line enters its fourth day of strikes, the former CEO and chairman of Chrysler and The Home Depot fueled concerns over its impact on the U.S. economy.
"This is far bigger than just three plants on strike. Every city, every state has dealers that will be affected by this," Bob Nardelli said on "Mornings with Maria" Monday.
"They'll start depleting their inventory, they'll start laying their salesmen off, they will eventually [lay] off their technicians," he continued. "So this thing has broad and deep tentacles. It will affect our economy."
About 13,000 autoworkers began picketing at three assembly plants in Michigan, Ohio and Missouri after their contract expired Thursday. It marked the first time in the UAW’s 88-year history that it walked out on Ford, General Motors and Stellantis – the maker of Chrysler and Jeep – simultaneously.
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The main point of contention between the two sides is higher pay, with UAW President Shawn Fain saying the union is seeking a more than 40% general pay raise for rank-and-file members over four years.
Former Chrysler CEO and Chairman Bob Nardelli warns we’re "woefully underestimating" the UAW strike’s impact on the U.S. economy on "Mornings with Maria" Monday, September 18, 2023. (Getty Images)
With the two sides unable to reach an agreement and expected to restart negotiation efforts on Monday, the macroeconomic impact may be significant: a 10-day work stoppage is estimated to cost $5.6 billion.
"I think this is going to go on for a while. I think the union, UAW, has dug in, and I think the companies are now dug in," Nardelli reacted. "And I think we are woefully underestimating the financial impact on this strike."
American consumers will become "jaundiced," according to Chrysler’s former CEO, on quality and deliverability on future car purchases. The business leader also warned that the strike may run up oil and gas prices.
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"This administration's doing nothing," Nardelli criticized, "but our state governor, he reduced the sales tax on fuel until we can get something in place to get energy costs down. So I think this will have far implications for a long time."
The "Big Three" automakers at the center of the strike – Ford, General Motors and Stellantis – will feel a sales impact that lasts more than a decade, Nardelli pointed out.
"If one of the Big Three loses a sale, they're probably going to lose it for 12.2 years. That's the average age of the installed base of the car part today," Nardelli explained. "So it's not like, 'Well, when the strike ends, we're immediately going to be able to pick up where we left off.' That is not true."
"The competition then locked these people in for multiple years," he continued. "So just the fact of going through a negotiation had a negative impact on those companies, we're going to see the same thing with the Big Three."
Stellantis workers attend a "members' handshake" event with United Auto Workers President Shawn Fain to mark the beginning of the UAW's contract talks with Stellantis. | Getty Images
The U.S. economy is under "tremendous pressure" coupled with "out of control" inflation, Nardelli further warned while noting the strikes will cause more "dislocation."
"Just look at [Ford CEO] Jim Farley, a good friend of mine, they've lost over $6 billion in the last two years trying to convert to electric vehicles. They just took a $9.2 billion grant to build a battery plant in Michigan. I think that's proof positive that Ford is not trying to cripple the United Auto Workers, but trying to create jobs as we change the technology that's being mandated by this administration," Nardelli said.
"The UAW is looking over the fence. They saw UPS get a 40% [wage] increase, they saw American Airlines get a big increase. They saw the dockworkers on the West Coast get a big increase," he added. "They're standing in line and saying: hey, it's my turn. And so I really think this thing will go on for a protracted period, unfortunately."
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President Biden weighs in on UAW strike, calls for 'record contracts' for workers
President Biden gave brief remarks on the United Auto Workers strike on Friday, accusing the Big Three automakers of taking in "record profits" and calling for "record contracts" for workers to resolve the strike.
UAW President Shawn Fain told MSNBC on Sunday that progress has been slow and that the union resumed talks with GM on Sunday and will do so with Stellantis and Ford on Monday.
In independent statements made to FOX Business, spokespeople from the Big Three all confirmed negotiations will continue Monday in good faith to "win together."
FOX Business’ Megan Henney and Eric Revell contributed to this report.