‘Tis the strike being felt in pockets nationwide.
On Sept. 16, the United Auto Workers Union began a coordinated strike at three major automotive plants, idling over 13,000 workers with the promise of more to come. This comes after negotiations soured after representatives from Ford, General Motors, and Stellantis denied the UAW’s demands of higher pay, a shorter work week, and a return to pension systems.
With dealers of the “big three” vehicles finally getting over supply chain issues that have plagued them over the past two years, a strike will reduce inventory and make their future cars even more expensive. According to Kelly Blue Book, a new and used car appraisal and pricing service, the average non-luxury buyer paid $44,700 in August, which is $471 less than in June.
A year ago, non-luxury prices were 0.5% higher. Expect this trend to end or even reverse with the car brands that are being picketed against. As with many industries, the costs are always passed to the end consumer.
The quickest way to end the strike is for manufacturers to cave to the demands of the UAW, which include 40% in compensation increases, a shorter work week, equal pay across all worker experience levels, and a return to the pension system that was abolished after the 2007 financial crisis. If the big three agreed to this, the consumer would have to pick those costs up with the delivery of every new vehicle.
If the strike persists for more than a few weeks, inventory will plummet, if it exists at all. If you would like a vehicle from traditional Ford, GM, or Chrysler, it will surely cost more. Parts may also start to go on backorder and increase in price.
For the consumer, there seems to be no way out of higher prices.
The longest automotive manufacturer strike in UAW history started in 1945 and lasted for 113 days but was only against General Motors. It ended with a compromise and is historically considered a loss by the UAW. This is the first time in history that UAW has a coordinated strike against all three major automotive manufacturing companies, and UAW President Shawn Fain is promising no compromise of the union’s demands. By only using a fraction of its estimated 383,000 workers to strike, it allows the UAW to strike longer than if they implemented a total walkout.
The striking workers will get a union paid assistance check of $500 while picketing, which can add up fast and deplete funds.
There is only one domestic car manufacturer with zero exposure to unionization, and that is Tesla. Elon Musk has stated time and again that he will not submit to unions in his manufacturing plants. He has even been under investigation for terminating employees at Tesla plants for trying to organize in 2022. Citing high pay and good working conditions, Musk does not believe that a union is necessary.
“Nothing stopping Tesla team at our car plant from voting union. Could do so tmrw if they wanted. But why pay union dues and give up stock options for nothing? Our safety record is 2X better that when plant was UAW & everybody already gets heath care.” Musk quoted in a May 20, 2018 tweet (words abbreviated for character limit on Twitter.)
As the big three look down the barrel of a price increase, Tesla has been upping production, drastically lowering prices on popular models, and bringing new models like the Tesla Semi and soon to be released Cyber Truck. Tesla also carries better name recognition and brand when it comes to full battery powered vehicles, has set pricing, and has a no pressure sales process. Tesla looks focused on the future by chasing a younger, more loyal customer base. If EVs are our future, Tesla looks unbeatable from where I am standing.
As for me, I will see you on the road!
