The total economic cost of the United Auto Workers strike is pegged at more than US$7 billion since it began more than a month ago.
Businesses ranging from airlines to auto parts makers are starting to feel the heat from the month-long strike by hourly workers at the Detroit Three automakers, with analysts warning that the financial hit could increase if the walkout does not end soon.entering its 36th day and the total economic cost pegged at more than US$7 billion, companies are counting the cost of lost revenue amid an uncertain economy and persistent inflation.
U.S. carrier Delta Air Lines earlier this month became one of the first big companies to flag a hit after it said the strike has curtailed a “significant” amount of business in Detroit.Paints and coatings maker PPG Industries said earlier this week it had included a profit hit of a “few cents” per share in its fourth-quarter forecast, while railroader Union Pacific said the strike has had a small impact so far.
With major parts suppliers such as Aptiv, Magna International, Lear, and American Axle set to report in the coming weeks, investors will be watching out for the scale of the financial hit the companies may take.“Suppliers are expected to feel the pinch from lower volumes in fourth quarter, but the pain will not be equally spread,” BofA Global Research analyst John Murphy said.U.S.
French car parts maker Forvia on Friday warned of possible temporary layoffs after estimating a bigger sales hit in October from the strike.
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