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Workers At GM Walk Off The Job
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VIDEO | Thousands of United Auto Workers walked off the job at GM plants around the country Monday in the first nationwide strike during auto contract negotiations since 1976.
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"Michigan has been in recession for nearly four years already, and that was in the context of national growth and no labor stoppages" said Dana Johnson, chief economist of Comerica Bank in Detroit. "It would intensify the local, one-state recession we've already been in. That's the last thing you would want to happen if you live in Michigan."
An extended work stoppage would move the state's unemployment rate, now at 7.2 percent, toward 8 percent, Johnson said. The national unemployment rate is 4.6 percent.
However, a broader ripple effect into the national economy is unlikely, he said. "There are plenty of other car companies," Johnson said.
The Detroit automakers are scrambling to find ways to reduce overhead costs. With the labor contract, the companies are trying to work out a compensation deal to bring U.S. labor costs more in line with those of their Japanese competitors, which do not have to pay retirees' medical costs.
Negotiators from both sides have been locked in day-and-night bargaining sessions over the past two weeks.
If a contract is reached, a majority of the union's rank-and-file must ratify it before it can be adopted.
Ahrens reported from Washington. Staff writers David Cho, Neil Irwin and Catherine Rampell contributed to this report from Washington. Special correspondent Vickie Elmer contributed from Michigan.
