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A General Motors Strike Could Have Potentially Cost Over $1 Billion A Week

General Motors cut it close with its latest contract renewal between the United Auto Workers union. At 11:46 p.m., the automaker announced it had reached a tentative agreement between itself and the UAW, avoiding a strike by 16 minutes.

Automotive News reported of the disastrous effects a strike could have potentially had for the automaker, with preliminary estimates totaling over $1 billion a week in lost revenue.

The calculations were formed through an average wholesale value of $25,000. If a strike were to have taken place, GM engine and assembly plants across the country would have shut down, effective immediately, costing the automaker 8,800 vehicles in lost production per day.

Basic math multiplies to $220 million per day, for a grand total of $1.1 billion per week of arbitration.

Again, the figures are estimations, but highlight why this tentative agreement is a major win for GM, as it aims to stay competitive and keep profit margins at 10 percent.

Not only would a strike have had disastrous ramifications in terms of revenue, but could have crippled supplies for hot-selling models like the 2016 Chevrolet Colorado and 2016 GMC Canyon.

2015 marks the first year in which GM-UAW employees were eligible to strike since 2009 when GM filed for bankruptcy and was bailed out by the U.S. and Canadian governments.

Former GM Authority staff writer.

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