The UAW Strike Against The Big 3 is Over. Now What?
Now that the United Auto Workers (UAW) have reached a tentative agreement with GM, Ford and Stellantis (Chrysler’s parent company), what should we expect going forward?
Thus far, we are seeing that the median delivery days from GM and Stellantis companies are quickly returning to pre-strike levels (Ford did not have Parts Distribution Centers impacted by the strike). However, I believe there will be noticeable impacts to the collision parts for these car companies. Here are a few key areas we should watch:
1. Sean Fain skillfully negotiated a record-setting compensation and benefits deal for UAW members from each of the Big 3. Those car companies will bear the costs of those increases, and that will likely result in an increase in the cost of OE collision replacement parts. In particular, the “OE only” part types related to ADAS and supplemental restraint system components may be most affected.
2. The increase in demand and pricing for recycled parts, in particular door and bumper assemblies, should return to pre-strike levels. We did see an expected increase in demand for aftermarket collision parts from the Big 3, but did not see an increase in pricing for those parts. Will this aftermarket parts bump in sales decline? That depends on whether the car makers that reduced the number of collision parts eligible for conquest pricing reinstate those to their conquest programs.
3. The UAW has publicly stated they intend to make a push to unionize the non-UAW car companies manufacturing in the United States, with the first two targets being Toyota and Tesla. Elon Musk has once again invited the UAW to hold a vote at Tesla, but don’t assume he is pro-union: Last year, Tesla was again found guilty of violating labor laws, this time for banning pro-union t-shirts at its factory in California. Toyota, seemingly in a pre-emptive counter to the UAW, has raised the wages of its assembly line workers a full 9%. Simultaneously, Toyota announced they were raising prices of their vehicles. Could a price increase in replacement parts be coming soon?
We will continue to monitor the longer-term impact of this historic settlement and how the aftershocks will be felt in the collision industry. For collision parts buyers, an open marketplace where all part types and delivery times are clearly represented is more important than ever.