UAW Strike: What You Need to Know
Tensions are rising as the United Auto Workers union and three of the world’s largest automotive manufacturers inch closer to a strike deadline. Labor contracts are on the table, but several sources say negotiators aren’t coming any closer to a day. For consumers, a strike could quickly impact supply, increase prices and have several knock-on effects, including persistent high prices for used vehicles.
Will UAW Strike in 2023?
The negotiated labor contract expires September 14, a date which serves as a sort of doomsday clock for the industry. According to reports, both sides remain far apart on the primary list of demands, which include a 40% pay increase, shorter work weeks, and cost of living adjustments. Reporters following negotiations say that these initial demands are meant to establish a positive, workable middle ground for workers, but finding that middle ground hasn’t been easy.
How a UAW Strike Impacts the Economy – And Consumers
Even a 10-day work stoppage could result in over $5 billion in lost revenue, impacting the broader economy and consumers. The Anderson Economic Group, which conducted the study, also found that Michigan, Illinois, and Indiana would suffer the worst of the stoppage. These states are home to some of the automotive industry’s biggest parts suppliers, many of which would face an immediate cash crunch if orders were halted or delayed. Michigan, Illinois, and Indiana are home to 40% of auto engine output in the US and 75% of all transmission production.
What Happened Last Time?
The previous UAW contract negotiations were in 2019. After failing to agree on numbers, more than 48,000 workers when on strike for 6 weeks, stopping work at over 50 automotive facilities in the US. Michigan’s economy went into a mild recession as a result.
How a UAW Strike Impacts Consumers
Historically low inventory levels could put dealers – and consumers – in a pinch within days of a strike. In 2019 and other strike years, market inventories were considerably higher, providing some level of insulation during production halts that reduced the impact on new vehicle prices. July inventories were marked at 162,000 units, less than one-fifth of the 649,000 units on the market in 2019.
The result? Dealerships may increase prices, potentially raising record-high monthly auto loan payments above the $725 mark in Q1 2023. If the strike is longer than 10 days, which appears likely, that could also impact used car prices, which are already at a record high.
Keep Your Car on the Road
The UAW strike, high prices and elevated interest rates make keeping your car tuned-up even more important. Trust your car maintenance to the friendly, professional technicians at Garfield Auto Service Center. We’ve helped keep Northern Michigan families on the move for over 50 years with reliable auto repairs at a fair price. Schedule an appointment with us today!