The accelerating United Auto Workers strike will likely put a dent in car repairs, in addition to slowing delivery of the newest models rolling off the factory floors of Detroit’s three automakers.
Car dealers in North Texas are bracing for the fallout.
On Friday, the UAW widened its weeklong strike to include 5,600 workers at 38 parts distribution centers operated by General Motors and Stellantis. UAW President Shawn Fain said the union is targeting GM and Stellantis for additional work stops because it failed to make progress in contract talks with those automakers.
In North Texas, about 125 workers at a GM parts distribution center in Roanoke and about 100 workers at a Stellantis facility in Carrollton walked off the job Friday. Workers in Roanoke say they send an average of 26,000 lines of parts daily to hundreds of dealerships across Texas and the US
Stephen Crain, general sales manager at Friendly Chevrolet in Dallas, said the new work stoppages nationwide will have a “ripple effect” on dealers within a couple of weeks.
“(Consumers) are going to see the shipment of cars that we’re going to be receiving … slowing down with the fewer cars being built,” Crain said.
Industry analysts predict it could take a few weeks before dealers see a significant shortage of new vehicles. But prices could rise even sooner if a prolonged strike triggers panic buying.
Derek Wallets, sales manager at Galleria Chevrolet, said he expects the strike to impact his entire operations.
“We’re trying to get more cars on a daily basis and can’t,” Wallets said. “It’s already scaring consumers.”
Sam Fiorani, an analyst with consulting firm AutoForecast Solutions, said the automakers had roughly 1.96 million vehicles on hand at the end of July. Before the pandemic, that figure was as high as 4 million.
The 150,000-member union initially targeted assembly plants for all three automakers to slow the production of small pickup trucks and other models. So far, it has avoided the plants that produce Detroit’s bestsellers, such as the full-size SUVs made in Arlington or the Ford F-150 and Stellantis’ Ram pickups, which represent outsize shares of the companies’ revenue and profit.
That represents a union strategy to gradually increase the pain of a strike on the automakers. However, the industry’s supply chain is so integrated that even hitting lower-profile plants cuts into production.
Targeting the parts distribution centers could inflict quick pain on GM and Stellantis, said Daniel Ives, an analyst with Wedbush Securities.
“The UAW is going for the gut punch as this strike gets a lot nastier,” Ives said. He called it “a very strategic and risky poker move by the UAW.”
Other industry observers said dragging current owners of GM and Stellantis vehicles into the fray will backfire on the union.
“People who have a car that they need to repair will not be sympathetic to the UAW when they can’t get the car fixed and can’t get it to work,” said Eric Gordon, a business professor at the University of Michigan.
The latest wave of strikes will be felt immediately, said Ashish Sedai, assistant professor of economics at the University of Texas at Arlington.
“Striking against a distribution center is not only going to affect GM and Stellantis, it’s going to have an immediate impact on the economy,” Sedai said. “People are going to think about how much they want to buy a car, people will lose jobs, car prices will go up. This is pretty tactical from the UAW.”
The national economy could lose up to $11 billion, but this could already be bad news for dealers in Texas, Sedai said.
“Consumers will start panicking,” Sedai said. “Think about it too, there’s been a lot of promises made in terms of delivering these vehicles that haven’t been fulfilled yet. That can have a long-term consequence and leave a bad taste in their mouth about these companies.”
Sedai said he thinks Arlington’s plant could be next to strike, which could create a costly combination for GM, Arlington and the state.
“Likelihood is that we’re going to see a strike in Arlington. If that happens, we’re in serious trouble in terms of the local economic situation.” Sedai said. “Arlington’s economy is heavily reliant on that plant. If they strike there too, we could see massive losses in the hundreds of millions.”
The Associated Press contributed to this report.