How are car dealers feeling about the UAW strike?
How are car dealers feeling about the UAW strike?
Early Friday morning, members of the Unite Auto Workers went on strike simultaneously at three plants in the Midwest — one each at Ford, General Motors and Stellantis, owner of Chrysler. That means the impact on vehicle production is limited to a few models at each company — for now.
But there are still consumers heading to dealerships looking to buy new cars, and the strike comes as the whole industry is just starting to emerge from a couple of years of tight supply and high demand for new and used vehicles.
When might consumers and dealerships start to feel the pinch from the strike?
For the last few years, dealers at Stivers Ford Lincoln in Waukee, Iowa, were selling vehicles before they’d even made it to the lot, said President Scott Politte.
But now, with higher interest rates dampening demand, “we think we’ll be able to be OK as far as new car inventory in the near future, meaning 30 to 60 days. And beyond that, it’s all going to be determined by what plants are affected,” Politte said.
“It really comes down to: How long does the strike last?” said Jessica Caldwell, head of insights at Edmunds. She said if the strike drags on, it could set back an industry that’s just recovering from those pandemic-related supply chain shocks.
“So the fact that there is this major disruption coming so close to a major disruption, it sort of just throws everything off balance,” Caldwell said.
But for some dealerships, this is a time of year when business slows down anyway.
“I would certainly be more nervous if we were coming out of winter going into spring,” said Zack Roberts, general sales manager at Heritage Ford in South Burlington, Vermont.
If the strike lasts a while, Roberts said there won’t be much he can do to build up inventory of new cars, so he and other dealers may look to stock up on used vehicles.
That could put a pinch on dealers that only sell used cars, like Best Auto Sales in Milwaukee, Wisconsin, where Daniel Walsh is the sales manager.
“So our purchase price is absolutely ridiculous at the auctions, where we buy our vehicles right now, and parts have skyrocketed also, so yeah, it can kill us,” Walsh said.
He said it could put used cars further out of reach for the lower- to middle-income customers his business typically serves.
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