Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Axios on your phone

Get breaking news and scoops on the go with the Axios app.

Download for free.

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Aïda Amer/Axios

The UAW strike against GM is now in Week 3, and the longer it lasts, the worse Michigan's fragile economy becomes — with huge potential consequences for the 2020 presidential race.

Why it matters: Michigan, which voted twice for Barack Obama then narrowly flipped to Donald Trump in 2016, will be a key battleground state in next year's election. A loss in Michigan would raise the stakes for Pennsylvania or Wisconsin. Meanwhile, other states with large auto-worker populations are watching.

  • "If the strikes goes on, the economic ripples will threaten Trump’s presidency," says Anderson Economic Group CEO Patrick Anderson, who has been studying the effect of local pocketbook issues on national elections since 2004.

Where it stands: The GM strike is now 17 days old, and the pain is starting to spread across Michigan — home to about half the 46,000 striking auto workers — and beyond.

  • Workers faced their first payday without a check last Friday, but $250 in weekly strike benefits kicked in this week.
  • Employees at some supplier companies as well as GM plants in Canada and Mexico have been laid off due to parts shortages.
  • GM is losing an estimated $25 million a day, and $113 million in profits to date.
"Workers who are on strike pay are not yet pushed to the wall, but they're certainly not going to go out to dinner and a movie right now."
— Charles Ballard, economics professor, Michigan State University

Catch up fast: The strike is the first at GM since 2007, and the longest since 1998.

  • Unresolved issues include wage increases, health care contributions, job security and the use of lower-paid temporary workers.

The bottom line: Workers argue that they gave up a lot to help GM through bankruptcy a decade ago and haven't gotten their share of the company's record profits since.

Michigan's traditional dependence on manufacturing gave rise to an old bromide: "When the nation catches a cold, Michigan gets pneumonia."

  • That's less true today because Michigan's economy is more diversified; in the 1960s, the auto sector was a quarter of the state's GDP while today it's 8%. Auto manufacturing represents about 1% of the nation's GDP.
  • But while the U.S. economy remains fairly strong, Michigan has the highest risk of recession in the nation, according to Lending Tree.

It's the economy, stupid: Pocketbook issues — like growth in income, inflation, and unemployment — have a well-established effect on how Americans vote. Anderson's research found...

  • In good times, voters tend to reward the incumbent party; in hard times, they tend to toss out the incumbents.
  • In tight races, even small shifts in a state's economic performance can matter.
  • Michigan's economy looked shaky in early 2012 but improved later in the year, helping Obama narrowly win Michigan and secure re-election.
  • In 2016, with the U.S. economy in good shape, the pocketbook model predicted the incumbent party would win the popular vote nationally, which Democrat Hillary Clinton did.
  • But Trump was able to tap into economic anxiety in manufacturing-heavy swing states including Michigan, squeezing out enough narrow wins in the Electoral College to carry him to the presidency.

What to watch: Trump promised Michigan in 2016 that he'd bring manufacturing jobs back to the U.S., a promise largely unfulfilled. Faced with industry disruption and a looming cyclical downturn, it’s not clear he can do anything to stop any of it.

Our thought bubble: Voters may put aside their economic worries if the election becomes a referendum on impeachment; 33% of UAW workers voted for Trump in 2016.

Go deeper

Felix Salmon, author of Capital
1 hour ago - Economy & Business

Warren Buffett resigns from Gates Foundation board

Buffett and Bill Gates in 2015. Photo: Dimitrios Kambouris/Getty Images

The Bill and Melinda Gates Foundation — the second-largest philanthropy in the world — is now governed by just two trustees, after Warren Buffett announced on Wednesday that he had resigned his position there.

Why it matters: The two remaining trustees, Bill Gates and Melinda French Gates, are going through a divorce.

Updated 2 hours ago - World

U.K. denies Russia fired warning shots at destroyer in Black Sea

The HMS Defender in the port of Odessa on Ukraine's Black Sea coast on June 18. Photo: Konstantin Sazonchik\TASS via Getty Images

Russia's defense ministry claimed Wednesday that a Russian warship and fighter jet fired "warning" shots at the British Royal Navy’s HMS Defender destroyer for encroaching on waters near Crimea in the Black Sea.

The latest: The U.K.'s ministry of defense disputed that any warning shots were fired, saying in a statement, "We believe the Russians were undertaking a gunnery exercise in the Black Sea and provided the maritime community with prior-warning of their activity."

Mike Allen, author of AM
Updated 2 hours ago - Politics & Policy

First look: WaPo Trump book's secret title revealed

Cover: Penguin Press

The Washington Post's Carol Leonnig and Philip Rucker will be out July 20 with "I Alone Can Fix It: Donald J. Trump’s Catastrophic Final Year," Penguin Press announced.

Breaking: Axios has learned that The Wall Street Journal's Michael Bender is moving "Frankly, We Did Win the Election" up to July 20, matching Leonnig-Rucker, from his earlier pub date of Aug. 10.

You’ve caught up. Now what?

Sign up for Mike Allen’s daily Axios AM and PM newsletters to get smarter, faster on the news that matters.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!