The ripple effects of the United Automobile Workers Union strike are starting to be felt, with car dealers reporting low inventory on popular models, and repair shops scrambling to find parts for GM vehicles.
They aren't the only ones feeling the pinch — as the strike by almost 47,000 members of the UAW enters its fifth week, the walkout is costing GM as much as $90 million a day, according to various industry estimates.
State and local governments are also getting squeezed, due to reduced tax revenues. Small businesses — especially those near GM plants — are struggling from a lack of foot traffic. And as many as 75,000 non-GM workers at supplier plants have either been laid off or suffered cuts in their hours or wages, according to estimates from Michigan-based Anderson Economic Group.
But, each day the strike continues, “It means the choice of specific models and trim levels will get depleted,” said Jeff Schuster, president of Global Vehicle Forecasts at LMC Automotive. GM’s most popular product lines may already be close to being depleted, he added.
“We have a cushion, but it won’t last long,” added Tim Jackson, the president of the Colorado Auto Dealers Association.
In the months leading up to the Sept. 14 contract deadline, GM boosted production in a bid to ensure it would have plenty of vehicles on dealer lots to weather a labor confrontation. Mainstream automakers like to have the equivalent of 60 to 65 days’ worth of inventory, and Cox Automotive estimated GM dealers had 77 “days supply” as picket lines went up. That varied by model and brand, however, with the equivalent of 57 days of Chevrolet Tahoe SUVs and 93 days’ worth of Chevy Silverado pickups.
The good news is that most American car buyers tend to settle for what they can find on a dealer lot, and may go for a different color, trim level or option package, said Jackson. But anyone with a particular request from the factory could be in for a long wait, he said. Even after the strike ends, industry observers warn that it will take some time to get to those back orders.
New car buyers aren’t the only ones facing backups. The closure of GM parts distribution warehouses has already created problems for owners needing collision and recall repairs.
“We’re waiting on parts,” said Tiffany Sullivan, assistant manager at Rainbow Paint and Body, a collision repair shop in Savannah, Georgia. Among the vehicles that could be stranded are a GM truck, an older Chevrolet Caprice, and a Chevy Corvette.
The problem is that there are so many different GM models on the road, many dating back a decade or two, so parts and service shops simply can’t keep all the necessary fenders, bumpers, and other big body parts on hand just in case.
On Thursday, GM CEO Barra met with top union officials hoping to get the negotiations back into gear. On Friday, the automaker took the unusual step of directly reaching out to UAW workers to let them see the details of its latest offer. Whether that will move things forward is uncertain, but GM isn’t the only one hoping to see the strike come to an end before it enters its fifth week.
“If this isn’t resolved in the next week or two, the impact will become more and more visible with each passing day,” said Schuster.