Why did the strike start?
Shawn Fain, president of the UAW, considered the offer of ‘the Detroit Three’ to make salary increases of up to 20% in four and a half years inadequate, considering that the CEOs of the three shipowners received salary increases of up to 40% cumulatively. In the last three years, it was the main reason for the strike.
The lack of an agreement between the automakers’ negotiators and the union led the UAW to declare the first simultaneous strike involving the three major American automakers last Thursday.
On Thursday night, September 14, Fain called for a strike at the General Motors plant in Wentzville, Missouri; to the Stellantis complex in Toledo, Ohio, and to Ford’s Michigan Assembly Plant.
Strike expands to spare parts distribution centers
A week after this first strike call at the three assembly plants, only ford has reached “real negotiations”” with the Union of Automobile Workers (UAW, for its acronym in English), in such a way that a limited strike is maintained, while the union called on Friday, September 22, a broader strikealso involving 38 Stellantis and General Motors distribution centers.
“We dealers don’t want anything to limit our potential to serve customers, so we hope the automakers and the UAW reach a quick and amicable agreement,” he told Reuters Mike Stanton, CEO of the National Automobile Dealers Association.
Late Sunday, Ford said there are still “important gaps to close” on key economic issues to be reached in the new labor agreement, however, the union mentioned that no company facilities were added due to “real progress” in the talks.
“Although we are making progress in some areas, we still have important gaps to close on key economic issues… The issues are interconnected and must work within a global agreement that supports our mutual success,” commented the shipowner.
Fain invited the president of the United States, Joe Biden, to a visit with the workers and the president accepted, pointing out that I would travel this Tuesday heading to Michigan.
The strikes could reduce the United States GDP by 0.39% in the third quarter, also causing “disruptions” in the global supply chains of the automotive industry.
“It’s time to reach a win-win deal that keeps American auto manufacturing thriving, with good-paying UAW jobs,” the official added.
The United States is the main market for the automotive sector in Mexico and its value chain, so what happens in the neighboring country to the north has a direct impact on the local industry.
The repercussions for Mexico
The National Auto Parts Industry (INA) estimates that within a week, the losses for national auto parts manufacturers will amount to 76 million dollarswhich represents 0.1% of its annual value, however, it emphasizes that the figure could change depending on its duration and if it increases to other factories.
According to S&P data collected by Reutersthe strikes are very likely to last several weeks, which could reduce the United States Gross Domestic Product by 0.39% in the third quarter, which at the same time would cause “disruptions” in the supply chain.
Alberto Cortés, general director of the INA, said that with the new announcement of the cessation of activities in the distribution centers, the organization emphasizes that the sector’s production is aimed at the terminal industry and not the after-sales market, so the effect The extension of the strike remains “marginal” for local auto parts manufacturers.
Dealers have also not reported problems with unit shortages so far.
Guillermo Rosales, president of the Mexican Association of Automotive Distributors, accepts that although talking about a conflict in the North American automotive industry involves turning on the alerts Due to the level of integration that the three countries grouped in the region have, the current situation must be analyzed in its proper dimension.
Ford Bronco, Jeep Wrangler and Chevrolet Colorado are the models that have been affected by the closure of the plants, which represent a minimum percentage of sales in Mexico. In addition to this, Rosales adds that there is a inventory of these for just over a month, at the same time that the offer of these manufacturers has a diversified catalog.
“There is inventory in the distribution centers of the assembly companies and in the distributors of the models affected by the striking plants…The assembly companies do not report any impact on their production lines in Mexico,” he adds to Expansion.