As of noon on Sept. 22, the UAW added GM and Stellantis US parts
distribution centers to its strike for a new four-year contract.
Since September 15, the UAW has been on strike at three vehicle
assembly plants at each of the automakers. The action on September
22 is in addition to the ongoing vehicle assembly strikes.

It is significant that the UAW has not added more vehicle
assembly, engine or component plants to the stand-up strike —
yet. The UAW aims to achieve 100% of its demands and is willing to
drag out the situation. Holding off striking at vehicle, engine and
components facilities ensures they still have leverage, while also
inflicting economic difficulties for automakers. While we are able
to provide some context and insight, S&P Global Mobility does
not have an estimate on what plants may be affected next as of this
time.

The UAW has said that Ford has responded to a number of its
demands, though that there is still ground to cover. As a result,
the latest strike additions are against Stellantis and GM. Ford
facilities have not been added.

The UAW strategy is to create increasing economic disruption
until they achieve the accommodations they seek, and it says it is
willing to go the distance, implying willingness to expand strikes
to include a full strike if they find it necessary. While
oftentimes union negotiations can be strained and difficult, this
year’s talks are proving to be the most contentious in decades.

Quotes from our S&P Global Mobility
experts:

“In selecting the parts distribution centers, the UAW
creates a scenario where manufacturing disruptions will be more
difficult to predict or manage, and could be widespread. A vehicle
has thousands of parts, and if one is missing, it cannot be
completed.” –Joe Langley, associate director, North
American production forecasting, S&P Global
Mobility

“Along with the specter of ongoing low inventory and some
vehicles perhaps being in even shorter supply as a result, the
situation also creates potential challenges for dealers and
customers, if repair parts become difficult to source. But UAW
leadership believes it has public support. In announcing this move,
the UAW said automakers and dealers could ensure customers aren’t
hurt, if they avoid ‘price gouging.’ It is unclear how much
patience an average consumer will have if they cannot get a vehicle
serviced.” — Stephanie Brinley, associate director,
Automotive Intelligence, S&P Global Mobility

“Parts suppliers to Detroit 3 vehicle and powertrain
assembly plants are breathing a sigh of short-term relief as the
second UAW strike escalation at GM and Stellantis parts
distribution centers has mainly indirect impacts. Unless a supplier
is completely focused on the aftermarket channel, the vast majority
of parts suppliers build a minor portion of their volume for
vehicles services at dealers. Direct and immediate impacts are
mainly felt with vehicle and component assembly plants that are
targeted for labor disruptions.” – Michael Robinet,
executive director, consulting services, S&P Global
Mobility

Fast Facts

Current vehicle assembly plants on strike:

• Michigan Assembly Plant, Wayne, Michigan, Ford: Produces Ranger
  and Bronco
• Wentzville, Missouri, GM: Produces Chevrolet Colorado, GMC
  Canyon, Chevrolet Express/GMC Savana, stampings for Chevrolet
  Malibu
• Toledo Assembly Complex, Toledo, Ohio, Stellantis: Produces
  Jeep Wrangler and Gladiator

Estimated Secondary Effects:

• Springfield, Ohio, Navistar: unconfirmed if down, assuming down
  9/20 due to reliance on Express/Savana bodies from Wentzville
• Fairfax Assembly, Missouri: Produces Chevrolet Malibu, Cadillac
  XT4

S&P Global Mobility estimated volume impact on daily
vehicle production, for all impacted and estimate secondary plants:
24,300 units. This assumes a straight time schedule, with no
overtime.

This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.

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• Source: http://www.spglobal.com/mobility/en/research-analysis/uaw-strikes-gm-stellantis-us-parts-distribution-centers.html