How Does the United Auto Workers Union Strike Affect Shoppers?

One week into the United Auto Workers union strike against the Detroit Three automakers (Ford, GM, and Stellantis), the union has called for an expansion of the strike in order to put additional pressure on the automakers to achieve the union’s bargaining goals. Initially, the UAW announced a strike at three auto manufacturing plants in the U.S., representing one from each of the Detroit Three automakers — the first time the UAW has struck all three automakers simultaneously in union history. Today, they announced further walkouts at 38 parts distribution centers at GM and Stellantis specifically — but not Ford, as the union claims negotiation progress has been better.

What does all of this mean to you as a consumer? Read on for the details.

What Does This Mean for Car Shoppers?

For the immediate future, not much.

As of this writing, the strike affects four vehicle assembly plants after the workers’ contract ended at midnight Sept. 15 without a new contract or extension being signed. The four plants and the vehicles assembled there affected are:

GM: Wentzville, Mo. (Chevrolet Colorado/GMC Canyon pickup trucks, Chevrolet Express/GMC Savana vans); Fairfax, Kan. (Cadillac XT4 SUV, Chevrolet Malibu sedan)
Ford: Wayne, Mich. (Ford Bronco SUV, Ranger pickup)
Stellantis: Toledo, Ohio (Jeep Wrangler SUV, Gladiator pickup)

While the models listed above are currently not being built, automakers (Stellantis in particular) worked overtime in August in anticipation of such an event, and inventory remains adequate on dealer lots. In fact, all three affected automakers currently have higher inventory than they did the same time a year ago (again, Stellantis in particular) and are likely to be able to weather a short-term supply crunch with minimal impact to shoppers. Anyone with a vehicle on order from these plants may see a delay, but keeping in touch with the ordering dealership is a good idea to either figure out an alternative (e.g., take a similar model out of inventory) or sit tight and hope for a quick resolution to the strike.

Should the UAW expand its strike to automaker plants that supply components, such as engines or transmissions, the resulting general production shutdown across the board would have a more widespread impact on vehicle availability as time goes on. That limitation on vehicle supply could then have an effect on prices for both new and used vehicles.

Parts Distribution Centers Going Down

The next phase in the UAW’s unique “stand-up strikes” is to call for a walkout at noon EDT today at 38 parts distribution centers for GM and Stellantis across the country. This is likely to have much more impact to consumers than the assembly plant shutdowns because these are the warehouses that send repair and replacement parts to dealer service bays and independent repair shops. This can result in repairs being delayed for vehicles already in shops, or in dealers and repair shops being unable to accept service requests due to unavailable parts.

Both situations put consumers in a bad spot. It means they could be without their vehicle for an extended period in the event of a collision repair or service appointment. It’s also likely to exert pressure on dealerships, which must bear the brunt of customer frustration when a repair can’t be completed or if a customer can’t get their vehicle in for a repair due to lack of parts availability.

Price Impacts

The UAW builds approximately half of the vehicles that are sold annually in the U.S., but only the “domestic” brands. Vehicles built by Honda, Toyota, Nissan, Subaru, Hyundai, Kia and others are not impacted by the UAW strike — yet. As such, immediate inventory impacts are not likely unless the strike widens to more plants, goes on for a long time (the current record is a 40-day strike on GM in 2019) or starts to impact supplier plants.

Suppliers, in automotive speak, are separate companies that build the components that go into the vehicles the automakers then assemble into complete vehicles — there are seat suppliers, brake manufacturers, transmission suppliers, etc. Some of these suppliers have started to shut down their plants due to automakers being idled by strikes, such as a seating supplier in Michigan that supplies seats for the idled Ford Bronco plant. If these supplier plants stay idled for a long time, the effects of the strike could then spread to other manufacturers, even those not being directly struck by the UAW, as suppliers begin to struggle financially.

New-vehicle prices are not likely to be impacted much by the strike at first, as the affected Detroit Three automakers can’t raise prices much given their competitors are not facing such issues and likely won’t be raising their own prices. Used-vehicle prices, however, are already seeing some impact from the strike, and it started in August when dealers began buying more vehicles in anticipation of an inventory crunch in September and October from a potential strike. Dealers are betting that if new-vehicle supply is constrained, buyers (who are still in a shopping mood in this mixed economy, despite high interest rates) might turn to used vehicles, spiking used-vehicle demand.

But there is no guarantee however that a new-car shopper will switch to a used-vehicle option given that other automakers are not facing strike-related new-car inventory issues and could poach shoppers with viable alternatives. Prices have already risen for used vehicles last month due to the dealer buying splurge, and those elevated prices are likely to be passed on to consumers shopping for a used car. On the plus side, it means trade-in values also are likely to rise, a boon for anyone trading in a vehicle on something new.

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The Bottom Line

It’s still very early days in this labor dispute, and the effects are not likely to start impacting vehicle shoppers in particular for some time yet. However, they may start to begin impacting current vehicle owners in need of mechanical or body repairs or routine maintenance due to replacement part availability being impacted by the parts distribution centers now idled by the UAW. We don’t know for sure what the long-term impacts will be, which automakers will be most affected or which models are ultimately most likely to see a supply crunch. But given that there’s a wide variety of automakers out there and plenty of vehicles for sale at the moment, there are lots of alternatives for shoppers looking for new vehicles — they just might not be with the brand they had planned on buying. But even that recommendation is premature given the situation is still developing and the UAW’s direction and action plan seems to be fluid.

This story will be updated as the strike continues.

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