UAW Strike’s 40-day mark brings more trouble for repair shops, dealerships, and customers.
Ford Motor Company and UAW Strike: Impact on Car Prices and Repair Parts
The ongoing strike between Ford Motor Company and United Auto Workers (UAW) has reached a new settlement, but the situation remains unresolved with General Motors (GM) and Stellantis. As the strike enters its 40th day, the focus has primarily been on higher wages for union workers, with little attention given to the potential consequences for car prices and repair parts.
“Hey, I’d like to make $40 an hour producing cars that break,” expressed a frustrated Jim Timon of Timon’s Car Care in Cincinnati, Ohio. “I know they’re grievances, but cars are going to be 40 percent to 43 percent higher when they’re done.”
The strike negotiations revolve around various issues, including wages and the reinstatement of cost-of-living adjustments that ceased in 2009.
Mr. Timon, a 71-year-old car repair veteran, has experienced significant delays in obtaining parts for his customers. He shared an example, saying, “I had one guy come in and needed air conditioning in a 2016 vehicle and waited 11 and a half months before it was put into production. I had another wait seven and a half [months] for a fuel line on a Jeep Wrangler. Even after they [the strikers] come back, everything is going to be in short supply and might take as long as a year to get those parts in production again.”
The UAW strike exacerbates the existing auto parts shortages, which have been a problem since the onset of COVID-19. Additionally, the limited supply of used vehicles on sales lots is worsening. According to Cox Automotive analysis, the unsold used vehicle inventory in the United States has decreased by 8 percent compared to the previous year, while sales have increased by 6 percent.
With GM, Ford, and Stellantis accounting for 40 percent of the U.S. car market, there is growing concern that an extended strike could lead to higher prices and further shortages for car buyers and repair shops.
Tom Maoli, owner of a New Jersey Ford Dealership, expressed the concerns of consumers, stating, “Consumers are definitely getting jittery, wondering what to do. It’s a nervous time for them, and I don’t know if they realize that the biggest issue will be parts. That means tires, brakes, anything you need to change and keep your car running.”
Brian Moegelin, owner of Brian’s Northend Automotive in Burlington, Vermont, highlighted additional challenges faced by states with mandatory inspections. He shared an incident involving a 2017 Chevy Volt that failed inspection due to a broken rear spring, which was on back-order with no aftermarket availability. This situation prevented him from issuing a Vermont inspection sticker.
Mr. Moegelin explained that his shop has been relatively unaffected by parts delays because they rely less on the big three automakers and more on companies like Bosch. However, in Cincinnati, Jim Timon expressed his frustration with the strikers, believing they are disconnected from the impact on businesses like his. He plans to retire in 2024, stating, “They have no idea. I don’t believe they even think about that. They think everything is fine and they warehouse enough parts.”
Dealerships and repair shops are also grappling with the fact that people are holding onto their cars for longer periods. Patrick Olsen, editor-in-chief at Carfax, explained that while demand for new cars is high, manufacturers prioritize putting parts into new vehicles rather than repair parts. This poses a problem as older cars require maintenance, leading to more accidents and repair work.
How long are repair shops experiencing delays in obtaining necessary parts due to the UAW strike?
Complications in obtaining car repair parts. The UAW strike has already caused delays in production, and as a result, the availability of new vehicles on the market is decreasing. This limited supply is driving up prices, as consumers have fewer options to choose from.
Repair shops are also feeling the impact of the strike. Without access to new parts, repair shops are experiencing delays in completing repairs for their customers. Jim Timon, a car repair veteran, shares his frustration with the situation. He recounts instances where his customers had to wait for months to get necessary parts for their vehicles. Even after the strike ends, he anticipates that the supply of parts will still be limited, potentially taking up to a year for production to catch up.
The UAW strike is happening at a time when the automotive industry is already facing challenges due to the COVID-19 pandemic. The pandemic disrupted global supply chains and created shortages in various industries, including the automotive sector. The strike only worsens these existing auto parts shortages, making it even more difficult for repair shops and consumers to find the parts they need.
Furthermore, the limited supply of used vehicles on sales lots is adding to the complexity of the situation. With fewer new cars available, consumers often turn to the used car market. However, with a decline in unsold used vehicle inventory and an increase in sales, the options for used cars are also diminishing. This scarcity is driving up prices in the used car market as well.
The impact of the UAW strike extends beyond the automotive industry. Higher car prices and delays in repair parts can have ripple effects on the broader economy. Consumers may be hesitant to purchase new or used vehicles if prices are inflated, leading to a reduction in car sales. Repair shops may also struggle to meet customer demands, potentially impacting their revenues and employment levels.
While the focus of the UAW strike has mainly been on worker wages and benefits, it is crucial to also consider the wider implications for car prices and repair parts. The strike highlights the interconnectedness of various sectors within the economy and emphasizes the need for timely resolution to prevent further disruptions. As negotiations continue between the UAW and automakers, finding common ground that addresses both worker concerns and the impact on prices and parts availability is essential for the industry’s stability and the satisfaction of consumers and repair shop owners alike.
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