How an auto workers strike could affect consumers and the economy as the clock ticks towards midnight
KANSAS CITY, Mo. (KCTV) - Automakers and the United Auto Workers have until 11:59 p.m. Thursday (ET) to strike up a deal or the UAW will strike.
United Auto Workers President Shawn Fain said if they can’t come to an agreement by 11:59 p.m. Thursday (ET), they will strike. That could have an impact on consumers, beginning with the cost and availability of cars and trucks.
The last big UAW strike was in 2019, but not just with General Motors and it lasted 40 days. Manufacturers lost $3 billion.
Mike Decker is the founder of Kedrec, an investment advisory firm in Overland Park, and also writes for the finance magazine Kiplinger’s.
He said families hadn’t experienced significant inflation like today and the auto dealers had a large inventory so they could sit out while still selling cars. Today, the circumstances are worsened as you buy a car and it could take a few months for it to show up with the limited inventory.
Strikes at parts plants could force production halts at multiple assembly factories.
Prices could stay steady but it could be difficult if the strike lasts longer than a couple of weeks, but what about foreign car companies?
“The foreign companies could be opportunistic and keep their prices low and enjoy the benefit of more sales,” Decker said, “or they could raise their prices with the other people that are struggling and just enjoy the additional profits.”
Fain took to Facebook Live to update workers, according to the Associated Press. He didn’t say whether the union would target vehicle assembly plants or component factories, one of the people said. He also didn’t say how many workers would walk off their jobs.
Decker said it’s like a game of chess when it comes to a strike because the dealers have inventory but it’s small and the workers are battling inflation costs outside of their industry not allowing them to have a proper work-life balance.
“If the strike lasts more than a couple of weeks then I would start to raise concern because there could be a ripple effect not just with car companies but other parts of the economy. We want to make sure this is resolved so it’s not a symptom or a canary in a coalmine of other potential issues in our economy,” said Decker.
A tip of advice from Decker, drivers don’t need a new car even if it’s their first, second, or third car they’ve ever owned. Buy a used one to help with costs, especially during a potential strike, and get creative by checking out salvage shops that mostly clean up cars with cosmetic work.
READ MORE: UAW may strike at small number of factories if it can’t reach deals with automakers, AP sources say
Copyright 2023 KCTV. All rights reserved.