The United Auto Workers (UAW) union has been on strike for more than a month, but the strike has had a limited impact on the car market. Because the union has adopted an unusual incremental strike strategy, its workers are still building most cars. And because automakers stocked up on new vehicles to sell before a strike, dealers are flush with supplies of even many models the union doesn’t currently build.
“For dealers and shoppers, there will be no impact for several more weeks to come,” says Cox Automotive Chief Economist Jonathan Smoke.
Cox Automotive is the parent company of Kelley Blue Book.
The “Stand-Up Strike” Grows Slowly
The UAW struck Detroit’s three large automakers when its last contract ended. Union workers seek raises to match several years of solid automaker profits and other changes, like job protections as the automotive industry builds more electric vehicles.
The UAW continues to pay striking workers part of their salaries out of a strike fund built from union dues during better times.
To stretch the fund and draw out the strike, union leaders adopted a never-before-seen tactic for the current strike. Workers have walked off the job at just a handful of plants, adding more periodically as talks drag on without a new contract.
That means even though the union is on strike, it’s still building most cars.
Enormous Publicity, Smaller Effects
The UAW had never before struck all three large domestic automakers – Ford, General Motors, and Stellantis (parent company of Chrysler, Dodge, Jeep, and Ram) at once. But Smoke says the stand-up strike strategy makes the move less dramatic than it sounds.
“The industry is now losing about 43,000 vehicles per week out of approximately 145,000 that the Detroit 3 were producing per week this summer, a reduction of approximately 30%,” he points out. “At this point, and barring any further action coming later this week still, we are just now approaching what the industry would have lost had the UAW simply gone after a single automaker.”
More than a month into the strike, Smoke says, supplies are “just now reaching a point where it will begin to have a material impact on product availability for consumers.”
Healthy Supplies of Most Paused Models
Car dealers measure their supply of new cars to sell with a metric they call days of inventory – how long it would take to sell out of cars at today’s sales rate if they never acquired more.
An old industry rule of thumb told dealers to keep about a 60-day supply on the sales lot. That ensured they had the right mix of colors and options to meet almost any request that walked in the door.
Automakers had plenty of warning that a strike was likely this fall. So, they ran factories at a rate that built up a stockpile of many cars.
The union’s stand-up strike strategy means most of those cars are still in production. The automakers’ stockpiling strategy means dealers have a plentiful supply of most cars built at paused plants.
Inventory of Models Paused Due to Strikes:
| Model | Current Supply |
| Buick Enclave | 148 days |
| Chevrolet Colorado | 20 days |
| GMC Canyon | 31 days |
| Ford Bronco | 49 days |
| Ford Expedition | 101 days |
| Ford Explorer | 99 days |
| Ford Super Duty | 66 days |
| Ford Ranger | 32 days |
| Lincoln Aviator | 124 days |
| Lincoln Navigator | 136 days |
| Jeep Gladiator | 122 days |
| Jeep Wrangler | 67 days |
Ample supplies mean shoppers can still find a good deal on most of these models. Jeep, for instance, is offering 15% off the MSRP of many Gladiator models this month. Buick is offering Enclave leases as low as $299 per month.
And car shoppers have responded. “Surprisingly, according to data from our team at Kelley Blue Book, all three of the Detroit automakers have actually seen an increase in shopping activity since the start of the UAW strike,” Smoke notes.
Other automakers have seen the same and aren’t facing strikes. “The victors from the disruptions so far are VW, Toyota, Nissan, and Honda,” he says.
What Could Change the Dynamic?
If automakers still have plenty of cars to sell, they’ll be under little pressure to settle the strike. However, several factors could force a change in the current paradigm.
If the union keeps work stoppages at roughly their current level and striking workers agree to a deal before Thanksgiving, Smoke says, “we’re likely to see pricing firm up in the new-vehicle market, incentives decline, and the sales pace to slow in the fourth quarter as a result.”
If the union adds significantly more plants to the pause “and builds to closer to 145,000 lost vehicles per week with no resolution by Thanksgiving, we can rightly expect a much larger impact that spills over into the used-vehicle market,” he says.
And strikes don’t happen in a vacuum. “Other macro-economic factors, including the negative impact on consumer sentiment caused by a war in the Middle East and chaos on Capitol Hill” could also put a drag on the market, Smoke cautions.
