A potential United Auto Workers (UAW) strike against General Motors, Ford, and Stellantis remains imminent as contract negotiations remain at an impasse. The current contracts between the UAW and the Detroit Three are set to expire at 11:59 p.m. EDT on Thursday. In the absence of an agreement by that deadline, the union may authorize its 146,000 members to commence a work stoppage.
This looming strike poses a significant disruption to the automotive industry, which is already grappling with supply chain challenges and escalating costs. For consumers, who are already contending with high car prices, it would present a considerable inconvenience.
Pat Ryan, the CEO of the car shopping website CoPilot, expressed concerns about the potential impact on inventory levels, especially for General Motors, which has the most constrained inventories among the three companies. On the other hand, Stellantis, the manufacturer of Jeep, Dodge, and Ram models, among others, boasts ample vehicle stocks at its dealership locations. Ryan suggested that Stellantis might leverage a strike to alleviate some of its inventory pressures.
Moreover, a strike is likely to exert further upward pressure on prices, which have already reached record highs. According to Kelley Blue Book, the average price of a new car currently exceeds $48,000.
In the event of a potential strike, Tesla could emerge as a notable beneficiary, given its established reputation as the most American-made car brand, as confirmed by a Cars.com report. Tesla’s appeal is further bolstered by recent price reductions and eligibility for a substantial $7,500 federal tax credit, accompanied by various state incentives, such as in Colorado, where they can reach up to $18,500. This aligns with the Biden administration’s proactive efforts to drive wider electric vehicle adoption, particularly as oil prices hover around $90 per barrel due to extended production cuts by Saudi Arabia and OPEC, further accelerating EV adoption.
Amidst ongoing negotiations between the UAW and the Detroit Three, there is no sign of a breakthrough. The union is advocating for higher wages, improved benefits, and job security, while the companies are proposing wage increases while also seeking concessions from the union. Both parties are anticipated to continue negotiations until the last moment, and if an agreement remains elusive, a strike could be called as early as Friday.