DETROIT – If the United Auto Employees union decides to strike towards Detroit’s Huge Three automakers when present labor contracts expire subsequent month, the financial impact would shortly tally into the billions, in accordance with a report launched Thursday.

A piece stoppage by almost 150,000 UAW staff at Common Motors, Ford Motor and Stellantis would end in an financial lack of greater than $5 billion after 10 days, in accordance with Anderson Financial Group, a Michigan-based consulting agency that intently tracks such occasions.

AEG estimates the overall financial loss by calculating potential losses to UAW staff, the producers and to the auto business extra broadly if the edges can not attain tentative agreements earlier than the present contracts expire at 11:59 p.m. ET on Sept. 14.

“Client and vendor losses are usually considerably insulated within the occasion of a really brief strike,” mentioned Tyler Theile, vice chairman at AEG. “Nonetheless, with present inventories hovering round solely 55 days, the business appears totally different than it did over the last UAW strike.”

Over the past spherical of bargaining in 2019, a breakdown in negotiations between the Detroit automakers and the UAW led to a nationwide 40-day strike towards GM. The automaker mentioned the strike price it about $3.6 billion that yr in earnings.

In previous negotiating durations, the UAW has chosen a lead firm of the Huge Three and focused preliminary collective bargaining efforts, together with the specter of hanging, there. However the brand new union management, already extra aggressive than in latest historical past, hasn’t promised to restrict such efforts to at least one automaker, leaving all three extra weak.

“It is a totally different yr than 2019,” AEG CEO Patrick Anderson mentioned Thursday throughout a webinar with the Automotive Press Affiliation. “It is a totally different atmosphere now.”

UAW President Shawn Fain throughout a Fb Stay occasion Tuesday reaffirmed that the expirations of the contracts are deadlines, not strategies. He mentioned the union has no plans to increase the present contracts to permit for bargaining to proceed with out a strike, which was beforehand widespread observe.

Results for the businesses would range based mostly on their U.S. operations and workers.

GM losses could be $380 million by way of a 10-day strike, in accordance with AEG. That compares to estimates of $325 million for Ford and $285 million impression on Stellantis.

AEG’s estimates don’t embrace UAW strike pay or assessments for strike pay, unemployment advantages or unemployment taxes, revenue taxes on wages and different potential results akin to settlement bonuses.

The report from AEG comes a day after RBC Capital prompt the potential impact of a strike on the automakers could also be “overblown.” In an investor be aware, analyst Tom Narayan argues GM’s “sharp snapback” after the 2019 work stoppage “suggests an identical occasion might be manageable.”

Nonetheless, the strike 4 years in the past was solely towards one automaker, not all three. A simultaneous strike would doubtless trigger ripple results extra shortly, particularly for embattled suppliers which might be nonetheless trying to get well from decrease manufacturing brought on by provide chain points.