As of September 15, 2023, the United Auto Workers (UAW) union has begun to strike at three plants in Michigan, Missouri, and Ohio. These facilities build a variety of trucks, vans, and SUVs for the “Big Three” domestic automakers, including:
- Ford Bronco and Ranger
- Chevrolet Colorado and Express
- GMC Canyon and Savana
- Jeep Gladiator and Wrangler
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.
- Unifor, the Canadian autoworkers union, is preparing to go on strike against Ford on 9/19 at midnight. Unifor President Lana Payne told reporters that the two sides are far apart.
- GM said it expects to idle its Fairfax Assembly plant in Kansas early next week due to a shortage of stampings made at the Wentzville Assembly plant in Missouri, which went on strike Friday.
- 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.”
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.