Update: Oct. 26, 2023
The United Auto Workers (UAW) labor union and Ford Motor Company reached a tentative labor deal late Wednesday. The terms have not yet been approved by UAW leadership, but call for a 25% compensation increase across the 4 1/2 years of the labor deal, beginning with an 11% increase.
This temporarily stems the UAW's preparation to strike at a key Ford facility in Dearborn, Michigan. The deal's announcement also led to union leaders sending a return-to-work message to workers at the Louisville, Kentucky, plant, which assembles the Ford Super Duty Series, Ford Expedition, and Lincoln Navigator. Furthermore, the ratification process has led to workers returning to assembly plants in Wayne, Michigan, following a 41-day strike. The Ford Bronco and Ford Ranger are produced in Wayne.
General Motors
GM's current offer stands at a 23% wage increase across 4 1/2 years, and on Wednesday, workers walked out at the Arlington, Texas, plant, where popular and profitable full-size SUVs such as the Chevrolet Tahoe, Chevrolet Suburban, GMC Yukon, and Cadillac Escalade are assembled.
Stellantis
The strike escalated on the Stellantis front earlier this week, when around 6,800 workers staged a walkout at the automaker's Detroit truck assembly plant, home of the Ram 1500. Stellantis's offer currently sits at a 23% wage increase and nearly 50% increase in company contributions to retirement plans.
As of Thursday, October 26, 29,000 of the nearly 146,000 UAW members remained on strike across 40 GM and Stellantis facilities across the U.S.
Update: Sept. 22, 2023
As of noon, Friday, Sept. 22, 2023, the United Auto Workers union has expanded its strikes to now include 38 parts assembly and distribution centers across 20 states, though these involve only General Motors and Stellantis at this time. Union President Shawn Fain said the group is inching closer to a labor deal with Ford Motor Company, but no information has been released about the numbers and figures.
There is no timetable for the end of the strike, so what does this mean for dealerships and consumers?
1. New parts will soon stop being shipped to OEM service centers for key brands such as Chevrolet, GM, Cadillac, Jeep, and Ram, causing a shortage and likely an increase in prices.
2. Consumers could be turning to retailers and smaller shops for parts, but the prices will still be heavily affected.
3. Service tickets at dealerships could be delayed: no parts or fewer parts = incomplete service orders.
4. There could be a spike in service requests in the coming weeks as consumers look to get their vehicles serviced before parts become even more scarce.
What can dealers do?
1. Double up on service-based marketing and messaging, driving the urgency to make the repairs now before prices potentially skyrocket for parts such as oil filters, brakes, pads, and even bigger assemblies like engines and transmissions. Creating a robust email campaign specifically targeting customers with vehicles due for service within the next 30 to 90 days would be a great start here.
2. Play up value propositions like pickup and delivery, mobile service, no appointments needed, and weekend service hours.
3. Contact iFrog or email us at sales@ifrog.com to talk strategy and create a full-scale marketing plan before we get too deep into the strike's timeline.
Sept. 15, 2023
At midnight, Friday, Sept. 15, 2023, 13,000 United Auto Workers (UAW) union members went on strike after union leaders and the Big Three of Ford Motor Company, Stellantis, and General Motors could not reach unison on a new labor agreement.
The reverberations of this work stoppage are profound, holding both short- and long-term implications for the automotive industry, right down to the dealerships, its employees, and, of course, the American consumers navigating a recovering landscape.
With the assembly plants in Wayne, Michigan (Ford), Toledo, Ohio (Stellantis), and Wentzville, Missouri (GM) at the forefront of the strike, this is the first time in the 88-year history of the UAW that shutdowns happened simultaneously for the Big Three among U.S. automakers. At the epicenter of the labor negotiations is a tug-of-war over industry profits: the UAW is pushing for a 36% wage increase across four years, a 32-hour work week, and more substantial pension benefits.
The gulf is currently wide, leading to negotiations stalling and the strike taking effect.
Worthy of note is that the 13,000 workers on strike represent only a portion of the over 145,000 UAW union members, but union President Shawn Fain’s bold proposals suggest the workers are perhaps digging in for the long haul.
What does this mean for your automotive dealership? For the second time in 3 years, dealerships will have to keep a close watch on supply and demand, a playbook already pored through during the COVID-19 pandemic that decimated the globe in 2020 and most of 2021 and caused industry-wide shortages of inventory on the lot.
Let’s dive deeper into the implications and take a look at the strategies iFrog Marketing Solutions has prepared to help your dealership weather this event.
Implications for the Dealership and Automotive Industry
Supply Chain
According to the latest reports, Stellantis is in the best shape with 75 days of inventory to complete the supply chain to dealerships. Ford’s coffer shows 62 days, and GM is sitting on 40 days of supply to keep fresh inventory arriving on trucks. What happens when supply runs out? The obvious: allocations shrink, and furthermore, this attrition could take place during Q4 and the holidays. What might that look like at your dealership?
Custom Orders
The boom in custom orders — especially for Ford — could go bust. Custom ordering your vehicle and waiting for delivery rather than driving one off the lot mitigated some of the inventory crunch in recent years. But with fewer workers at the plant building vehicles and parts, will the wait now be worthwhile? This will also directly affect the supply-and-demand conundrum, so where will the tipping point be?
Parts
Generally an afterthought until you actually need that vital component or desirable accessory, the production of parts — the same parts also used to assemble the vehicles — will feel the squeeze. Several of iFrog’s dealer partners are attempting to get ahead of this by ordering parts now before supplies potentially run out, but how long will that splurge last?
Brand Image
For Ford, Stellantis, and GM, the potential hit to their bottom line is at the forefront, but the Big Three’s public image can also take a major hit. History has shown that the majority of the U.S. population is bound to side with the workers who are fighting for a bigger piece of the economic pie, labeling corporations as greedy and putting them in the crosshairs. If the work stoppage is drawn out and more UAW union members join the picket lines, the economic implications will begin a steady trickle into everyday life. Whom will the public be sympathetic toward in a prolonged battle?
Born in a Dealership®
Our roots in the showroom, the lots, the service lanes, and marketing meetings make us eminently qualified to help your dealership hold steady during turbulent times.
Partner Support
It’s what we do best, because our partners are not a ticket to be resolved, and the personal touch is a daily expectation. As always, we will ensure we have robust partner support in place to address questions and concerns promptly. This includes both online and offline channels.
Monitoring and Adaptation
We have a collective finger on the pulse of this unprecedented event and are ready to adapt our marketing strategies because of the duration or turning of a tide in the strike.
Transparent Communication
Openly communicate with customers. Honesty is key here, and customers appreciate businesses that keep them informed. A campaign that assures the dealer’s dedication to customer satisfaction could be highly impactful.
Highlight Inventory
If a dealer has a substantial inventory of vehicles not affected by the strike, better to entice customers to grab it while it’s there. “What’s here today may not be here tomorrow” is a very real situation if the strike persists.
Creative Campaigns
The urgency mentioned above can be crafted into a holistic campaign. Creative and compelling copy, visuals, and overall narratives can be the vehicles to drive the messaging home to potential shoppers.
Social Media Engagement
Social media is an excellent tool for quick, real-time communication. Engaging with customers through these channels can effectively convey messages about inventory concerns, dealer value propositions, and maybe even the strike itself.
Reach out to iFrog
Much is unknown in the early days of the UAW strike, so getting ahead of things might be the difference between still being in the game or being out of it as we enter a critical time and precipice in the history of the automotive industry. Contact us today or email us at sales@ifrog.com to get started on a comprehensive marketing strategy.
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