On September 15, 2023, the United Auto Workers (UAW) union started a series of strikes targeting the “Big 3” domestic automakers to negotiate better pay, stronger benefits, and to close the gap between new and existing employees. After six weeks, this strike grew to 50,000 workers across eight assembly plants and 38 parts distribution centers in 22 states.
The strikes at Ford, GM, and Stellantis have tentatively come to an end, but the impact of the shutdowns on specific trucks, vans, and SUVs will be felt for months to come.
Vehicle production impacted by the strike:
- Buick Enclave
- Chevrolet Colorado, Express, and Traverse
- Ford Bronco, Explorer, Expedition, Ranger, and Super Duty pickups
- GMC Canyon and Savana
- Jeep Gladiator and Wrangler
- Lincoln Aviator and Navigator
- RAM 1500
While the strike will impact production of several models important to the fleet industry, we have seen this happen multiple times over the past few years, including shutdowns due to the Russia-Ukraine War, COVID-19 closures, and the UAW strike targeting General Motors in 2019.
We can review historical data from 2016 – 2019 to see how the market (as measured by the Manheim Used Vehicle Index) shifted during the 2019 UAW General Motors strike.
If negotiations between the UAW union and Ford, GM, and Stellantis are swift, the impact to the overall market will be minimal. However, if a resolution takes weeks (or months) to come to fruition, or additional plants join the strike, we can expect to see a drop in supply and a rise in new and used vehicle and prices at retail, wholesale, and at auction.
What Can Fleets Do to Prepare for an Extended Strike?
- It’s important to have a Plan A, B, and C – especially if your organization is waiting for order fulfillment from Ford, General Motors, or Stellantis. It’s easy to fall into the trap of not having a plan when the strike has just begun and the landscape is fluid, but as seen in the past, the impact and duration of a strike can be unpredictable.
- Stay nimble – while the current factory closures might not impact your fleet orders, your plans might require course correction if things change.
- Be prepared for longer delivery times. If transportation workers join the strike, new vehicles purchased during the strike could suffer from delivery delays.
- Expect extended turnaround times for vehicle upfitting, maintenance, and repair as these providers may rely on parts and components from the “Big Three” automakers.
- Lean on your partners and experts to guide you:
- Increase inventory levels, if possible, to ensure that you have enough vehicles to meet your needs during the strike.
- You can continue to use traditional channels while inventory is available, purchase out of stock, utilize a program like ReadyFleet, or find lightly used vehicles through a channel like Merchants Commercial Sales.
UAW Strike Updates
- The UAW went on strike as of 12:00 AM against Ford, General Motors, and Stellantis after failing to reach a new contract agreement. The strike is the first major auto industry strike in the United States since 2019, which impacted General Motors production for 40 days.
- The union is demanding a number of concessions from the automakers, including higher wages, better benefits, and more job security. While automakers have offered some concessions to their demands, the UAW was not able to come to an agreement. It is too early to tell how long the 2023 strike will continue, but Merchants Fleet clients can rest assured that we are prepared with strategic solutions for alternative acquisitions during the strike.
- The UAW rejected a 21% wage increase as proposed by Stellantis and is holding with the demand for a 40% wage increase.
- GM notified employees Friday that its Fairfax assembly operation, which builds the Cadillac XT4 compact crossover and Chevrolet Malibu midsize sedan, could run out of parts as soon as next week.
- Unifor has put its strike plans on hold in Canada. This will keep more than 5,000 members on the job for the time being.
- Negotiations between the “Big Three” automakers and UAW continue, with the next main table meetings scheduled for Wednesday 9/20.
- In a video message posted to X (formerly Twitter) Monday night, UAW President Shawn Fain said, “If we don’t make serious progress by noon on Friday, September 22nd, more locals will be called on to Stand Up and join the strike.”
- The UAW on Friday said it plans to expand its week-old strike against General Motors and Stellantis but will spare Ford Motor Co. additional production stoppages after making “real progress” in talks this week.
- Workers at all GM and Stellantis parts distribution centers in the U.S. will walk off the job at noon EDT on Friday, UAW President Shawn Fain said in a Facebook broadcast. He listed 38 locations in 20 states that will be joining the strike.
- The locations joining the strike Friday package and ship parts that are used to repair customers’ vehicles, so dealerships could see their service business hampered by the escalation.
- On Friday roughly 7,000 additional workers joined the UAW strike, bringing the total up to 25,000. The two new locations include a GM assembly plant in Lansing, MI and a Ford assembly plant in Chicago, IL. As the strike enters its third week, the additional models now on production hold include the Chevrolet Traverse, Buick Enclave, Ford Explorer and Lincoln Aviator.
- No additional strikes took place this week. With threats of another GM shut down at the Arlington, TX plant, an agreement was made to place GM electric vehicle battery plants under a national contract with the UAW.
- While last week showed promise in UAW contract negotiations, this week has been the polar opposite. On Monday, the UAW rejected a proposed contract deal with Mack Trucks leading 4,000 workers to go on strike in PA, FL, and MD. Yesterday, we saw the expansion of the Ford UAW strike at the Ford KY truck plant. This adds 8.700 workers to the “Big Three” strike, with a total count of 33,700 workers striking at the domestic automakers. This plant produces popular models like the Ford Super Duty pickups, Ford Expedition, and Lincoln Navigator.
- UAW contract negotiations between GM and Stellantis have improved, with both automakers matching Ford’s wage increase offer over the four-year contract. Despite this, the UAW has added the Stellantis Sterling Heights assembly plant to the strike, with 6,800 more workers walking off the job and bringing the total number to over 40,000 on strike.
- After six weeks of strikes, the UAW has made incredible progress with the Big 3 Detroit automakers. On October 25th, Ford and the UAW reached a tentative labor deal that set the stage for a tentative agreement with Stellantis on October 28th. The UAW expanded their strike with General Motors that same day, which was the pressure needed to iron out a tentative deal on October 30th.
Merchants is Here for Our Clients
- We will keep you informed of the latest developments in the strike negotiations and the potential impact on fleet vehicle availability and acquisition costs.
- We will help you develop a contingency plan. This could include identifying alternative vehicle sources, adjusting fleet schedules, and exploring other transportation options.
- We will continue to offer flexible leasing options. Using short-term leases or lease extensions can offer the flexibility to navigate the challenges of the UAW strike.
- We will continue to monitor the rental market closely and advise you of alternative options to fill any gaps in your fleet.