Repairing GM vehicles gets tougher as autoworkers strike disrupts car-parts market
The United Auto Workers strike against General Motors entered its tenth day on Wednesday, and its ripple effects are being felt by auto part dealers and new car dealers across the nation.
With many replacement part warehouses shut down, dealers are beginning to run short of components to repair cars, trucks and SUVs. And companies that make auto parts are also starting to see work slow down. Dealer inventory of new vehicles is holding up but starting to get depleted on a few models.
Meanwhile, GM is losing millions of dollars and has been forced to close one Canadian factory and send workers home at another.
FILE- In this Dec. 11, 2017, file photo General Motors Chairman and CEO, Mary Barra, is interviewed by Cox Automotive's Michelle Krebs during an Automotive Press Association event in Detroit. (AP Photo/Carlos Osorio, File)
Auto parts
The biggest impact so far seems to be the lack of availability of some replacement parts for GM vehicles. The strike has shut down a parts depot in Charlotte, North Carolina, where the Southeast region normally gets its replacements, said Ed Williamson, who owns several GM dealers in the Miami area.
Dealer inventory
GM had a hefty 77-day supply of vehicles at the end of August, but big SUVs were only at about 55 days, lower than the industry average of 61. With no shipments since Sept. 16, supplies are starting to drop.
GM in Canada and Mexico
Citi analyst Itay Michalei estimates GM is losing $100 million in profits per day. The strike has already caused GM to lay off 1,850 workers and shut down its assembly plant in Oshawa, Ontario, near Toronto. Another 730 were laid off from an engine plant in St. Catherine's, Ontario, according Unifor, the Canadian auto workers union.
Businesses in communities where workers are going on strike are guaranteed to feel the pinch too as workers scale back their normal spending habits. They're getting by on strike pay of $250 a week and whatever savings they have.
Why haven't negotiations between UAW and GM made progress? Conditions for temporary workers are a sticking point for the UAW. Temp workers are union members doing the same work as permanent employees, but get half the pay and far fewer benefits.
The union wants those workers to get a path to being permanent and get pay and benefits that more closely match their permanent counterparts, even when they're temporary.
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GM counters that employing temporary workers is good for permanent employees, enabling them to take time off. It also gives the company flexibility to scale up production for new models and combat employee absenteeism.
The Associated Press and FOX Business' Ken Martin contributed to this report.