{"id":22448,"date":"2023-09-26T21:08:12","date_gmt":"2023-09-26T21:08:12","guid":{"rendered":"https:\/\/microloannexus.com\/investing\/uaw-strike-brings-fight-to-consumers-worsening-car-parts-shortages-already-plaguing-the-industry\/"},"modified":"2023-09-26T21:08:13","modified_gmt":"2023-09-26T21:08:13","slug":"uaw-strike-brings-fight-to-consumers-worsening-car-parts-shortages-already-plaguing-the-industry","status":"publish","type":"post","link":"https:\/\/microloannexus.com\/?p=22448","title":{"rendered":"UAW strike brings fight to consumers, worsening car-parts shortages already plaguing the industry"},"content":{"rendered":"
\n

The United Auto Workers strike has brought the threat of service and maintenance disruptions, just as wait times at the dealerships were already getting long.<\/p>\n

Carmakers weathered a years-long pandemic-related chip shortage, but a lesser-known auto-parts shortage was part and parcel of the supply-chain troubles that bedeviled the industry during that period. That shortage has not been alleviated.<\/p>\n

\n

\u201cDealers were already seeing parts shortages,\u201d said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions. \u201c[The strike] just exacerbates that issue. Some customers were already waiting days, weeks and even months\u201d for some parts, he said. <\/p>\n

And for many, keeping a car in good shape by following maintenance schedules and promptly fixing problems became more important as prices for used and new vehicles rose. <\/p>\n

The UAW last Friday expanded its strike to 38 General Motors Co.
\n GM,
\n -2.42%<\/bg-quote>
\n and Stellantis NV
\n STLA,
\n -2.08%<\/bg-quote>
\n auto-parts fulfillment centers in 20 states, sparing Ford Motor Co.
\n F,
\n -1.19%<\/bg-quote>
\n facilities after the union said it made progress in negotiations with that company. The strike began on Sept. 14 at one assembly plant each of the Big Three.<\/p>\n

Targeting the parts-distribution system of GM and Stellantis was a \u201cless expensive way for the union to hurt [original equipment manufacturers],\u201d Fiorani said. <\/p>\n

In moving the fight to dealerships and to customers, the UAW preserves its strike fund and holds onto its \u201cnuclear option\u201d of hitting assembly plants making full-size pickup trucks and SUVs, a move that was widely considered to be next for the union, Fiorani said. <\/p>\n

Unlike other UAW strikes, which for many years targeted one car company at a time, \u201ceverything that traditionally happened has been sidestepped,\u201d he said, and \u201cthere\u2019s no playbook.\u201d <\/p>\n

Service is a big piece of a car dealership\u2019s profit, said Edmunds.com analyst Jessica Caldwell. <\/p>\n

The labor action at the fulfillment centers is unlikely to affect production for now, and it is too early to see the broader effects of the plant strikes at the dealerships, she said.<\/p>\n

As the threat of a strike loomed, carmakers bulked up on inventories. Cox Automotive recently estimated that U.S. new-car inventories have ticked above 2 million in September, a level not seen since April 2021.<\/p>\n

Stellantis, maker of Chrysler vans, Dodge SUVs and Jeeps, was working with more inventory than GM and Ford, Edmunds.com\u2019s Caldwell said. If the strike continues, consumers are first likely to see an end to the few incentives carmakers had just started to offer again, she said.<\/p>\n

And if the strike were to expand to factories making the Big Three\u2019s higher-margin full-size trucks and SUVs, it would happen at a time that sales of those vehicles are entering their seasonal high, Caldwell said. <\/p>\n

Fall is the high-water mark for sales of large pickup trucks and SUVs, as some consumers and businesses get large new vehicles in anticipation of winter or for year-end tax purposes, she said.<\/p>\n

Analysts at Barclays said in a note Tuesday that they don\u2019t expect the strike to have \u201cany immediate effect\u201d on car prices at least through October. <\/p>\n

The strike\u2019s extension to the distribution centers could pressure auto-parts prices, but it is still unclear \u201chow quickly, and by how much, prices could be affected,\u201d since those parts cannot be easily replaced by parts from other vendors, the analysts said.<\/p>\n

Ford, which late Monday paused work on a $3.5 billion electric-vehicle battery plant in Michigan, has emerged as the \u201cde facto lead negotiator\u201d in the strike, analysts at Evercore ISI said in a note Tuesday. <\/p>\n

If no progress is made, the union is likely to hit the full-size pickup and SUV plants, which would also signal to Wall Street that the strike could last four to five weeks, which is longer than previously thought, the analysts said. <\/p>\n

See also:<\/strong> Will UAW strike provide an opportunity for Tesla \u2014 and push up car prices?<\/p>\n

Shares of Ford, GM and Stellantis have shown some resilience during the strike, mostly because Wall Street appears to be banking on a relatively swift resolution to the labor strife. <\/p>\n

Ford\u2019s stock has declined about 1.5% since its close on Sept. 13, a day before the contract expiration date and the start of the strike. Shares of GM have lost around 3.6% since then, and shares of Stellantis have gained 1.2%. In comparison, the S&P 500
\n SPX
\n has dropped more than 4% from that date. <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The United Auto Workers strike has brought the threat of service and maintenance disruptions, just as wait times at the dealerships were already getting long. Carmakers weathered a years-long pandemic-related chip shortage, but a lesser-known auto-parts shortage was part and parcel of the supply-chain troubles that bedeviled the industry during that period. That shortage has<\/p>\n","protected":false},"author":1,"featured_media":22449,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[],"class_list":{"0":"post-22448","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"yoast_head":"\nUAW strike brings fight to consumers, worsening car-parts shortages already plaguing the industry | Micro Loan Nexus<\/title>\n<meta name=\"description\" content=\"The United Auto Workers strike has brought the threat of service and maintenance disruptions, just as wait times at the dealerships were already getting\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/microloannexus.com\/?p=22448\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" 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