Auto workers strike could lead to price increase regardless of outcome

Auto workers strike could lead to price increase

BOSTON - With United Auto Workers Union (UAW) now on strike, the shutdown days are quickly adding up for the three major United States car manufacturers Ford, General Motors, and Stellantis. The UAW is now threatening to expand their strike to more locations if negotiations don't progress by Friday. The question now becomes, what does this mean for the consumer?

"Right now, there is inventory on lots and dealer's lots. The union is pinpointing the big three domestics, but it's not an overall shutdown, so there is going to be some time," suggests Robert O'Koniewski, Executive Vice President of the Massachusetts State Automobile Dealers Association (MSADA).

O'Koniewski believes the lingering effects on consumers and dealers are still weeks away. He says if the strike continues into parts of October, then inventory could shrink, and prices could rise.

"They are talking about expanding picketing to different locations. Right now, it's 10% of the domestic plants," explains O'Koniewski. "That's about 14,000 union workers, but if they expand the striking, and the shutdowns, it will speed up that impact."

Consumers may not be able to dodge price hikes regardless of the outcome. O'Koniewski believes any rise in labor costs during negotiations will trickle down to the price tag for consumers.

"The union gave a number of financial concessions to the manufacturers 15 to 16 years ago during the bankruptcies, and they made concessions after," adds O'Koniewski. "Depending on the deal the manufacturers strike, you are looking at higher costs."

If prices take a drastic hit. MSADA thinks people may gravitate toward foreign cars. O'Koniewski says those manufacturers don't have unions, and lower labor costs can help those companies undercut the domestic market.

"If in fact if there is a constriction of supply at the domestic dealerships, you're going to see people moving to internationals," suggests O'Koniewski. 

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