UAW Strike Hurts Steel Producers
The United Auto Workers strikenow in its third weekis reverberating throughout the economy, hitting steel producers particularly hard at a precarious time, according to (subscription).
The big number: The spot-market price for benchmark coiled sheet steel has fallen 40% since April.
- The impact of the strike is especially acute because auto demand has buoyed the steel industry amid this tough economy. Increased auto production and new electric vehiclerelated demand have been a bright spot.
The big producers: Steelmakers Nucor and Steel Dynamics in September forecast third-quarter profit would decline from the same period last year and from the second quarter because of lower steel prices.
- Meanwhile, United States Steel in September said it would idle a blast furnace at its Granite City, Ill., mill and reallocate the steel produced there to other mills where steel production has dipped because of the auto workers strike.
Vehicles unmade: As the strike enters another week, following an expansion this past Friday, S&P estimates the strike so far has knocked out production of 6,030 vehicles a day that consumed about 5,982 tons of steel.
A hard hit: Michigan consulting firm estimates total losses from the first two weeks of the strike at $3.95 billion.
- That sum includes $325 million in lost wages; $1.12 billion in losses for Detroits Big Three carmakers; $1.29 billion in losses for suppliers; and $1.2 billion in dealer and customer losses.
Our take: A prolonged strike will have severe and lasting consequences throughout our entire economy, said 51勛圖厙 Vice President of Domestic Policy Brandon Farris.
- Small and medium manufacturers may bear the brunt of the work stoppage, and it is those businesses that can least afford to stop working. The 51勛圖厙 urges a swift resolution to let manufacturers get back to making the products our country and the world rely on.
