UAW strike hits at wrong time for many pocketbooks, driving some to take out strike loans (2024)

Timing is everything, but the clock was going into overtime working against Annette Kramer's financial tranquility back in late September.

The UAW contracts at the Detroit Three automakers expired at 11:59 p.m. Sept. 14 and only three factories went on strike at first, including parts of the Ford Michigan Assembly Plant in Wayne.

At noon a week later on Sept. 22, Kramer was on strike when UAW leadership extended its tradition-breaking, so-called Stand Up Strike to 38 GM and Stellantis facilities across the country, including the GM Lansing Redistribution Center, which employs 207.

"We were in the middle of buying a house when this whole thing went down," said Kramer, 54, who wasn't at work when the strike hit her GM facility in Lansing on Sept. 22.

Kramer has guardianship for her autistic 10-year-old grandson, Kire Dumont, and she was taking him to the doctor that day. She got word from co-workers who were in the GM building in Lansing.

"I heard there were a bunch hoot and hollering and yelping. They carried on when they left; they didn't go quietly," said Kramer, who speaks in a gentle tone that reminds one of a favorite aunt or sister.

Kramer supports the strike — maintaining that a tiered wage system that pays some workers less money must go and she'd like a raise and improved health care coverage. But being out of work comes at a personal cost.

Life's big costly moments — and everyday bills — don't stop just because more than 34,000 UAW workers ended up on strike at 44 Detroit Three locations across the country, as of Oct. 18. Thousands more are laid off as production disruptions grow at General Motors, Ford Motor and Stellantis, which builds the Jeep, Ram, Chrysler, Dodge and Fiat brands.

Kramer's story reflects the difficulties that the UAW strike is putting on many working-class families — who had a hard balancing act before the economic disruptions began spreading when the UAW walkout happened in September.

Michigan credit unions already report steady interest in newly offered strike relief loans to bridge gaps. The loans are often for up to $4,000 at 6.99% or 8.99% or higher.

"To be 100% honest, I'm not surprised that people are financially stressed," said Portia Powell, chief experience officer for One Detroit Credit Union, which began offering strike assistance loans Oct. 6.

"Honestly, people were financially stressed before the strike started," Powell said.

"I would imagine that people are even more stressed. And what we're starting to see now are the residual effects. We have members who are not necessarily on strike but their employer might have cut their hours."

$500 in strike pay falls short of a regular paycheck

Now, UAW strikers at the Detroit Three are collecting $500 a week in strike pay — which would amount to roughly $12.50 an hour on some jobs. Strike pay is treated as taxable income when strikers file their 2023 federal and Michigan income tax returns next year.

Kramer was making more money at GM than she's ever made in her life — about $28 an hour. That's more than $58,000 a year, before taxes and other deductions, and before any overtime.

She's not fond of accepting voluntary overtime, saying she wants to spend time with her grandson. Some love extra money, she says, because they'd rather be at work than be at home. She works for her family.

"There are days you have to take it," she said. "We're not hurting for anything. When we get back, I'll take any overtime they offer."

How she landed that precious job at GM is a fantasy story involving some amazing timing itself.

For fun, Kramer enjoys dressing up to go to the Renaissance Festival in Holly, as well as attending anime conventions.

She dressed up as the winged Pokémon dragon Charizard for one anime convention in Allendale and made some new friends there who happened to work at GM and clued her into some job openings, gave her a referral and outlined the process for getting hired at GM.

Kramer got the chance to join GM in July 2015, shortly after she'd just taken a job at a new Meijer store in Alpena where she grew up. Before that, she worked for more than 16 years at the Walmart in Alpena where she met her boyfriend, William Petrusha, who was working there, too. They've been together 15 years.

"Sixteen years at Walmart and I was just making 14 bucks," she said, adding that she knew she could make more at GM eventually.

She was making a bit more an hour at Meijer, she recalled, and when she told her boss she would be leaving in three days for a job at GM, she remembers him asking if she could take him with her.

She recalls starting out eight years ago at about $15 an hour at GM and soon making about $19 an hour 90 days later — and that's why she says others who are newly hired should be put on a faster track toward higher pay.

She moved from Alpena and lived for about six months with the friends she made at the anime convention.

She hoped that she'd get a pension at GM but didn't realize new hires no longer would receive one. She does have a 401(k) now that has less than a year's pay. She contributes money and received contributions from GM into a 401(k).

As part of GM's contract offer that was disclosed Oct. 9, GM said it agreed to increase its contribution to a 401(k) for hourly employees who don't have a pension and are covered under the plan to 8% from the current 6.4%.

"I'm very happy with the job," Kramer said. "I work with a great group."

Since then, though, she's lived through three contract expiration dates.

Kramer was hired at GM before the UAW's contract with the Detroit Three automakers expired in September 2015. She was a bit on edge then. In contract negotiations, GM skilled trades workers rejected a tentative contract in November 2015, delaying any agreement covering all UAW workers at GM, but union members at GM didn't go out on strike in 2015 and a contract ultimately was reached.

Kramer was on strike for 40 days in 2019 and the timing could not have been worse. She had just transferred from the GM's parts facility in Lansing to a parts warehouse in Swartz Creek.

Kramer and Petrusha lived together then in a three-bedroom, one-bath home in Corunna, a countryside community where a deer processing plant for hunting season is just down the road from their home.

Their home is about 40 miles northeast of her GM job in Lansing but only 19 miles from the GM CCA Parts Division in Swartz Creek.

Transferring to Swartz Creek made sense to cut down her commute. She was in training in Swartz Creek before the 2019 UAW strike at GM and a mix-up on where her strike pay, then only $250 a week, was sent triggered delays that caused her to be without strike pay for about a month. Fortunately, she said, she had a very understanding landlord who worked with the couple during the strike.

More: An autoworker's guide to determine eligibility for jobless benefits during the strike

That fall, a UAW rep at Swartz Creek was kind enough to lend her money to cover a trip to see her ailing father in Alpena. Her father, Ricky Williamson, later died at age 72 on Oct. 31, 2019, while she was still on strike.

She got COVID-19 early in the pandemic when many thought it was just a cold. She later transferred back to Lansing in 2020.

This strike, she said, the family is in better shape. The strike pay has been arriving as it should, and it's double what it was four years ago. And she prepared for the strike by stocking up on food and cutting back, including not spending about $38 each weekend for tickets this summer for Kramer and her grandson to regularly attend the Renaissance Festival in Holly.

She proudly shows a photo of her grandson joining her on the picket line this fall.

One of Kramer's daughters works nights at the same GM facility in Lansing and is on strike now, too, along with her husband.

"I'm hoping it's done by the end of October but I'm not going to hold my breath," Kramer said.

She's continued a hobby of making T-shirts and coffee mugs with fun phrases. She has an order from her boss but told him he won't get that shirt until after the strike. She's hoping to make some money here and there selling those items during the strike.

More budgets are being squeezed

The financial challenges touch a long list of bills, hitting metro Detroit neighborhoods and rural towns in Michigan.

"It is only prudent for families that rely upon the auto industry to be cautious with their spending until they see the strike being resolved," Patrick L. Anderson, CEO of the East Lansing-based Anderson Economic Group, told the Detroit Free Press.

Now, much of the buzz from picket lines to Wall Street is that the strike could last into November. And things could get tighter for many families.

Week five, which began Oct. 13, was being viewed as a "danger zone" for automotive suppliers, according to the Anderson Economic Group.

A survey from the trade group MEMA of original equipment suppliers, released Oct. 13, indicated that 39% of the surveyed automotive suppliers have now laid off part of their staff due to the strike.

Of the suppliers that haven't laid off workers yet, half indicated that they're expecting to begin laying off workers the week of Oct. 30. The industry group is seeking federal assistance for smaller suppliers.

This survey was conducted Oct. 9 through Oct. 11 with emails being sent to 524 MEMA Original Equipment Suppliers members. There were 54 respondents.

Anderson said the strike could lead to some permanent losses of production and that suppliers could need financial assistance to return to operation.

GM's plan to delay production of the Chevrolet Silverado EV and the GMC Sierra EV at Orion Assembly in Orion Township, like the pause in the construction of Ford’s EV battery plant in Marshall and the cancellation of Stellantis at the CES technology expo in Las Vegas in January, Anderson said, "all underline the fact that the big costs of this strike are already affecting business decisions and future jobs and investment."

According to the firm's broadly encompassing estimate, the total economic losses from the UAW strike against the Detroit Three auto manufacturers have now reached nearly $7.7 billion through Oct. 11.

That includes an estimated $359 million in lost wages for UAW workers on strike and others laid off due to production cutbacks at the Detroit Three.The wages lost do not reflect any offset from strike pay or other work picked up.

Most of these costs, Anderson said, are being borne by workers and by small- and medium-size businesses, not by the Detroit Three.

Other strikes trigger financial upheaval, too

The UAW strike at the Detroit Three isn't the only labor disruption.

Casino workers at the Detroit casinos — MGM Grand, MotorCity and Hollywood Casino at Greektown — went on strike Oct. 17, the first strike ever since opening in the late 1990s and 2000. The Detroit Casino Council represents 3,700 casino workers across five unions.

And more than 1,000 Blue Cross Blue Shield of Michigan employees represented by the UAW walked off the job Sept. 13 after failing to negotiate a new contract.

As with the 2019 UAW strike that involved 48,000 union members at GM, some credit unions are once again offering special strike relief.

One Detroit Credit Union — which has members who work at the Detroit casinos, auto companies and Blue Cross Blue Shield — is offering strike assistance loans that can range from $500 to $4,000. The rate can be as low as 8.99% but could be higher based on one's credit score. The offer runs through Dec. 31 for members of the credit union. It applies to union members who are impacted by ongoing labor strikes. No payment is needed for 60 days.

Someone who took out a $1,000 strike loan, for example, could be looking at a monthly payment of $87.66 on a 12-month loan with an annual percentage rate of 8.99%.

One Detroit Credit Union has closed on five strike loans so far, according to the credit union's Powell, and has 60 applications under review currently. The credit union has received about 120 applications.

Not everyone will qualify, Powell said, as the lender will review an applicant’s credit history and delinquency status. The average loan so far is $1,500 with an average rate of 12.99%.

The goal, she said, is to offer people a loan that can be repaid over a short period of time and not overstretch someone's finances. Some people are applying for the loan, just in case, and delaying closing on the loan until it's really needed. They have up to 30 days to close on that loan.

Some families on strike could need extra cash — especially at a relatively lower interest rate — sooner rather than later to make sure that they aren't late paying their bills or missing payments completely.

A loan at 8.99% isn't inexpensive but it's far better than an average rate on a credit card of nearly 21%.

Many strikers expect that overtime hours will be offered once they return to work — and perhaps even pay off these strike loans.

Farmington Hills-headquartered Community Choice Credit Union— which has a location in Warren, near the General Motors Global Technical Center — closed on nine financial relief loans totaling $38,000 as of Oct. 18.

The credit union also assisted 16 members with a “fee-free skip a payment” plan for one month. The credit union is offering its special "financial relief loan" to credit union members who are part of the UAW, along with related workers who are on strike or furloughed because of the strike. The annual percentage rate on the loan is 6.99% for 36 months for up to $5,000.

"The longer (the strike) lingers, we would expect to see more members contact us about these special offers, depending on the level of financial pressure they are feeling," said Barb Babington, vice president of lending for Community Choice Credit Union, which serves people who live, work or worship across Michigan.

Even so, taking out a loan while your income is reduced should be a last resort, most experts say.

Wyandotte-based Michigan Legacy Credit Union said it is not offering strike loans but suggests that members communicate early on if they can't pay their bills.

"At a time of any crisis, people have a tendency to panic," said Carma Peters, president and CEO of Michigan Legacy Credit Union, which has a branch across from the Ford Flat Rock Assembly Plant.

Many don't take time to understand the higher costs of taking on another loan or getting a loan modification.

It's important to keep communicating with lenders, utilities and others when a problem hits. Find out the options — and possible drawbacks.

Those facing a loss of income are advised to dig into all the details to know if an option, such as skipping a payment on a current car loan, is the right move. Many of these payment options, according to the Consumer Financial Protection Bureau, "will increase the amount of interest you pay over the life of the loan to varying degrees; some options may increase your payment amount or the number of payments you owe."

She didn't wait a minute to get a strike loan

Because Kramer expected financial headaches early in the 2023 strike, Kramer immediately went to the Owosso branch of her credit union to see about applying for a strike loan. Kramer knew she wanted to avoid covering bills with high cost credit cards — saying she's gotten into trouble with credit cards in the past. She only has a debit card now, no credit cards.

She went to the branch so quickly that the LAFCU credit union representative wasn't even certain the GM facility was on strike yet.

Kramer ultimately took out a $4,000 strike loan for 36 months. The annual percentage rate is 8.99%. The first $128 monthly payment is due in 60 days — or roughly sometime in November for Kramer.

"We're hoping to be back by then," Kramer said.

Lansing-based LAFCU said it has made 48 strike loans totaling $148,000 as ofOct. 10.

Kramer holds tight onto her humor to get through the uncertainty ahead. She jokes that her cats are named "Grave" and "Chaos," so she's used to living with Grave Chaos.

What she didn't realize, she said, was that the strike loan would come in handy when they were falling short on money to cover closing costs when buying their home for $95,000. The couple had been renting the home for eight years and then the landlord offered it up for sale. They spent a while figuring out how to cover the expenses, get a mortgage and make the deal work.

Her grandson has a well decorated bedroom with a red Jeep-themed bed and a tent in the corner. It's been their home — and they wanted to stay there even if the timing was a little off this year.

"The house," she noted, "is not really a house."

Instead, she said, it's really two salvaged trailers from a tornado that she believes someone put together.

"They're calling it a mobile home," she said. Their mortgage isn't through the credit union but instead through a lender that offers mortgages on manufactured and mobile homes.

Now, she's looking at a $400 a month car loan, $260 on her monthly budget plan for Consumers Energy and a $1,050 monthly mortgage, which is a bit more than the rent. The couple closed on the house on Oct. 2 and face their first mortgage payment in November.

Petrusha, 35, makes about $16 an hour at his job at Machine Tool & Gear in Corunna, a nonunion auto supplier that hasn't had layoffs yet. But the couple worries that it's possible, if the strike goes on, that he could see his hours reduced or a layoff. He's also taken on a few hours working at nearby Valero gas station for extra cash.

"As long as he doesn't lose his job," Kramer said, "I think we can stay afloat."

Contactpersonal finance columnist Susan Tompor:stompor@freepress.com.Follow her on Twitter@tompor.