The United Auto Workers union strike is targeting facilities that produce critical parts, meaning car and truck production will soon be affected.
Talks over the weekend failed to produce much in the way of results, although the union called the weekend talks with Ford “reasonably productive.”
"Negotiations continue,” a Ford spokesman told Fox Business. “As we have said all along, Ford has bet on the UAW more than any other company. We are committed to reaching an agreement with the UAW that rewards our workers and allows Ford to invest in the future.”
That suggests Ford, at least, hopes to resolve the walkout quickly. Karl Brauer, executive analyst at iSeeCars.com, says a short strike might have little impact on the new car market. But consumers would quickly feel the effects of a lengthy walkout.
Inventory could quickly drop
“Average new car supply has recently rebounded to approximately 60 days, meaning a two-week strike could cut domestic dealer supply by 25 percent and a one-month strike could halve it,” Brauer told ConsumerAffairs. “This would undoubtedly be reflected in higher prices for U.S. models, along with a related price increase for competitive brands.”
That’s because the Big Three automakers – Ford, GM, and Chrysler – make up 40% of the U.S. new car market. If those cars go up in price, foreign automakers would benefit but might be less inclined to negotiate with buyers if their competition is more expensive.
If new cars are less available and more expensive it could also affect the used car market. During the pandemic, when there was a shortage of new cars and trucks, used car prices surged due to increased demand.
“Unlike the COVID supply chain issues, which impacted all new car production, a UAW strike will only restrict domestic sales, likely leading to a market share shift toward import automakers,” Brauer said.
“There’s also the economic impact to both the local and national economy, which could be quite substantial due to the automotive industry’s role in U.S. GDP. Given the existing economic challenges facing U.S. consumers, a strike could be the tipping point into a recession.”
Photo Credit: Consumer Affairs News Department Images
Posted: 2023-09-18 13:01:38
