For the first time since 2007, unionized employees at a major automaker are on strike nationwide. Now, like then, that automaker is General Motors — but the 2007 strike lasted just two days. Its follow-up could go considerably longer.
The strike affects some 46,000 hourly employees at GM, the Detroit automaker behind Buick, Cadillac, Chevrolet and GMC. How many cars are affected? How long might the strike last, and what else should shoppers know? We have some answers below.
Why Are Workers on Strike?
The strike stems from a failure to negotiate a new four-year contract between GM and its union. The United Auto Workers, which represents manufacturing employees at GM, Ford and Fiat Chrysler Automobiles, generally targets one of the three companies for negotiations on a new contract before it structures similar deals with the other two. The automaker this time was GM, which in 2018 announced wide-ranging job cuts and plans to shutter the pipeline for five manufacturing facilities, including assembly plants in Michigan and Ohio.
The UAW entered talks with GM on July 16, but progress has been slow. The union’s contract with the Detroit Three expired Sept. 14, but Terry Dittes, vice president of the union’s GM arm, wrote in a letter the same day that the UAW still had “significant differences between the parties on wages, health care benefits, temporary employees, job security and profit sharing.”
The union’s contract with all three automakers expired Sept. 14. Without a new contract, the UAW authorized a strike to begin before midnight on Sept. 16.
How Many Cars Does This Affect?
Anywhere from 10 percent to nearly 17 percent of all new-car sales. The minimum scenario — 10 percent — comes if the strike only impacts vehicles assembled at UAW plants in the U.S., a list of more than two dozen GM models for 2019. (The union represents all of GM’s U.S. assembly plants.) Such vehicles comprise about 60 percent of all GM sales in the country, spokesman Jim Cain told Cars.com. The General accounts for 16.8 percent of all new cars sold in the first half of 2019, by Automotive News’ tally, so 60 percent of that works out to around 10 percent of all auto sales — a baseline for the minimum impact.
The maximum scenario, by contrast, assumes all GM vehicles are waylaid by the strike. That’s more plausible than you might think, as even GM’s imported vehicles might carry major components — like powertrains or stamped parts — that come from a U.S. plant with workers now on strike.
What’s more, even if the supply chain for a given GM model avoids any plant affected by strikes, the car may still have trouble reaching the dealership. The Teamsters union, a group that encompasses many truck drivers, announced its solidarity with the UAW on Sept. 15. That means some 1,000 vehicle transporters represented by Teamsters won’t deliver vehicles to GM showrooms, a spokesman for the union told Cars.com.
Will GM Dealerships Run Out of Cars?
Not anytime soon. GM dealers on Cars.com have nearly half a million vehicles on hand as of this writing, and the automaker is sitting on a glut of inventory. By Automotive News’ estimate, GM on Sept. 1 had an 80-day supply of new cars on hand — a measure of how long it would take at the current sales pace to sell all inventory at dealerships, factory lots, ports of entry or in transit. That’s well beyond the industry’s 63-day average. But if the UAW and GM didn’t agree on a new contract for weeks on end, such supply would eventually run short.
Does This Mean I’ll Have to Pay More for a GM Vehicle?
Probably not anytime soon. If a strike drags out for weeks, diminished supply could prompt GM to reduce incentives. But for now, that doesn’t seem to be happening. Chevrolet’s consumer site still shows significant discounts on many models as of this writing, including the Trax SUV that we spotlighted in our best deals for September. Input your ZIP code to see Buick inventory here, Cadillac here, Chevrolet here or GMC here.
Are Workers Still on the Job at Ford and FCA?
Yes. The union extended contracts with the automakers, UAW spokesman Brian Rothenberg said. Either side can cancel the extension with three days’ notice, he added.
How Long Might This Go?
It’s hard to say. Negotiations resumed Sept. 16, but a resolution remains missing as of this writing. The last time a nationwide UAW strike took a prolonged turn was for 28 days in 1978. The two sides remain far apart —Rothenberg said GM had “only agreed to 2 [percent] of hundreds of provisions” — but some signs of common ground exist.
On Sept. 15, GM announced an offer to improve profit sharing, increase wages and pay $8,000 in signing bonuses per worker, as well as grant “solutions for unallocated assembly plants” in Michigan and Ohio, but Rothenberg confirmed to Cars.com that the UAW rejected the deal. In a letter obtained by Cars.com, Dittes called the overture “GM’s first serious offer” and said it “may have been possible to reach a tentative agreement and avoid a strike” had the automaker filed it sooner.
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The economic backdrop only adds more uncertainty to the mix. New-car auto sales fell 2.4 percent in the first half of 2019, by Automotive News’ tally, but more recent economic signals are more optimistic. Still, once you throw in uncertainty over trade pacts and vehicle emissions standards, it’s anyone’s guess where the auto industry will go.
“Nothing about what they’re doing is certain, and the union is saying [they’re] looking into those same economic conditions, and they’re asking for jobs and income security and guarantees for the next four years,” said Kristin Dziczek, vice president of industry, labor and economics group at the Center for Automotive Research. “That seems pretty difficult to manage. Not everybody gets everything they want out of it.”
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