A strike by members of the United Auto Workers Union at a trio of Detroit Three plants in the United States could hamper Canadian parts suppliers’ post-pandemic recovery the longer it drags on, say industry experts.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said suppliers are still trying to overcome the fallout of the COVID-19 pandemic. “We are in a wrestling match with the reality for the last three years,” said Volpe. “On the one hand, we’ve grown some resilience. On the other hand, our balance sheets have not. But, we’re in the passenger’s seat on this. Unfortunately, from a Canadian point of view, all we can do is watch for the next.”
About 13,000 hourly UAW members went on strike early Friday at Stellantis, Ford and General Motors plants in Michigan, Ohio and Missouri. The job action, to back wage and benefits demands, halted production of the Ford Bronco, Jeep Wrangler and Chevrolet Colorado.
While the strike marks the first time the UAW has targeted all three automakers, it’s unlikely to have a crippling impact on inventory, said Sam Fiorani, vice-president global vehicle forecasting at U.S.-based AutoForecast Solutions.
“The initial plants targeted by the UAW are largely symbolic of the union’s power,” Fiorani said. “Production of mid-sized pickups along with the Jeep Wrangler and Ford Bronco have been halted by the striking workers, but the impact on the vehicle manufacturers will be minimal in the long term. Immediately, there will be some suppliers in Canada hurt by the work stoppage, but no plants in Canada supply engines or transmissions to these vehicles.”
It appears, said Fiorani, that “the unions are coordinating their efforts in this window between the end of the UAW contract Sept. 14 and the end of the Unifor contract next week [Sept. 18].”
The next three days in the UAW dispute will be critical, said Volpe. “I see the threat for a serious impact if it expands beyond the three plants that went off last night and it goes beyond the weekend.”
The industry is highly integrated, Volpe noted, adding that 48 per cent of the parts “made at volume in Canadian factories are exported to the U.S., and a very significant portion of that are going to Detroit Three plants in the Midwest.
“So, we are absolutely going to feel the impact of this.”
Meanwhile, pickup competitor, Toyota, could benefit from a protracted strike, said Fiorani.
“Ford is just ramping up production of the new Ranger, so inventories are naturally low on that model. Jeep inventories are high, which will keep salespeople happy for the next few weeks. And the Bronco has been on back-order for years, however buyers are willing to wait.
If this [strike] drains mid-sized pickup inventories substantially … Toyota is the beneficiary.”
UNIFOR BARGAINING NOT AFFECTED
Unifor President Lana Payne says effects of the UAW strike have been limited, so far.
"We haven't had an impact yet because there's not what I would call an integration between those plants and the Canadian facilities,” she said. "This could change at any time, depending on whether or not we see an expansion in the labour dispute in the United States. We're watching this, we're assessing it, and we'll deal with what comes."
The UAW’s approach hasn’t affected Unifor’s bargaining.
"Right now, we're carrying on. It is business as usual for us with Ford Motor Co. We're at the table with them,” she said. "Three days is a lot of time, and I'm always confident that we can get there, but we're prepared for everything."
Payne said should the two sides not reach a deal before the contract expires at 11:59 p.m. ET on Sept. 18, and the union decides to strike, it would only be “Ford for sure."
David Kennedy of Automotive News Canada contributed to this report.
