UAW stir hits GM, Stellantis dealers, customers with parts shortage

Robert Besser
26 Sep 2023, 20:45 GMT+10

This week, the United Auto Workers expanded its members' strike to include dealers selling and servicing General Motors and Stellantis vehicles
While being highly profitable, selling and installing auto parts is vulnerable to disruption as the auto industry relies on deliveries at short notice
Repair parts and servicing generate 40 percent or more of the gross profit margins of major auto retail chains, such as AutoNation and Lithia

DETROIT, Michigan: This week, the United Auto Workers (UAW) expanded its members' strike to include dealers selling and servicing General Motors (GM) and Stellantis vehicles.

While being highly profitable, selling and installing auto parts is vulnerable to disruption as the auto industry relies on deliveries at short notice.

Richard Fasulo, a diagnostic technician from Wappinger, New York, who works for a Cadillac franchise and used car dealers, said, "It is going to become near impossible to get a lot of these parts."

"The broader strike, which targets 38 parts distribution centers owned by GM and Stellantis, is going to have these shops telling their customers, 'We don't know when we can fix your vehicle. It might be indefinitely'," he added.

Repair parts and servicing generate 40 percent or more of the gross profit margins of major auto retail chains, such as AutoNation and Lithia.

Mike Stanton, President and CEO of the National Association of Auto Dealers, said, "Dealers do not want to see anything to limit our potential to serve customers, so we certainly hope automakers and the UAW can reach an agreement quickly and amicably."

The UAW will expand the strike by aiming to shut down plants that make the highest-profit vehicles, such as pickup trucks.

Thomas Morris, 60, who went on strike on September 22 at a General Motors parts distribution center in Philadelphia, said, "It is definitely going to impact customers."

In a statement, Stellantis said it was awaiting a response from UAW to their "competitive offer" a day earlier and looking forward to a "productive engagement," while GM said the company has "contingency plans for various scenarios."

"The UAW had made a smart move," said Arthur Wheaton, director of labor studies at Cornell's School of Industrial and Labor Relations.

"I think it is a great strategy going after the distribution centers. Services are big business. That is how they make a lot of their money," he added.

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