The problem for the companies is that dealerships and other repair shops typically have lean inventories and depend on receiving parts quickly from the manufacturers’ warehouses. AutoNation reported a gross profit margin of 46% from service shops at its dealerships last year.

Selling parts and performing service is highly profitable for car dealers. Our wages went up 6%, the CEO pay went up 40%. “What has hurt the consumers in the long run is the fact the companies have raised prices on vehicles 35% in the last four years,” he shot back. On a picket line Friday, Fain was asked whether striking against the spare-parts centers would hurt - and potentially alienate _ consumers. Indeed, the union has shown unusual discipline in sticking to its talking points. Fain has said repeatedly that a critical part of its plan is to keep the companies guessing about the UAW’s next move. The more combative union has declined to discuss its strike strategy publicly. “You just told all your customers, ‘Hey we can’t fix those $50,000 to $70,000 cars we just sold you because we can’t get you the parts.’ ” “It severely hits the dealerships, and it hurts the customers who purchased those very expensive vehicles in good faith,” said Art Wheaton, a labor expert at Cornell University. Millions of motorists depend on those shops to maintain and repair their cars and trucks. Service shops are a profit center for dealers, so the strategy could prove effective. Striking the parts centers is designed to turn up pressure on the companies by hurting dealers who service vehicles made by GM and Stellantis, the successor to Fiat Chrysler. Ford was spared from the latest walkouts because of progress that company has made in negotiations with the union, said UAW President Shawn Fain. In expanding the strike on Friday, the UAW struck only the parts-distribution centers of GM and Stellantis. In the United States, the UAW began its walkout more than a week ago by striking three assembly plants - one each at GM, Ford and Stellantis. If the deal is ratified in voting that will end Sunday morning, the union will use it as a pattern for new contracts at GM and Stellantis plants in Canada. The union, Unifor, said the deal, which covers 5,600 workers, also includes better retirement benefits. The tentative deal was forged earlier this week, hours before a strike deadline. In Canada on Saturday, Ford workers began voting on a tentative agreement that their union said would increase base pay by 15% over three years and provide cost-of-living increases and $10,000 ratification bonuses. “They could target more of the plants that are building the most profitable vehicles.”Īs examples, he mentioned a plant in Flint, Michigan, where GM builds heavy-duty pickups, and a Stellantis factory in Sterling Heights, Michigan, that produces Ram trucks.Īll three companies said that talks with the union continued on Saturday, though officials said they expected no major announcements. “They could add more assembly plants to the list,” Abuelsamid said. Sam Abuelsamid, an analyst at the consulting firm Guidehouse Insights, suggested that with so many workers and factories still running, the union has a number of options with which to squeeze the companies harder. “We believe the next step for UAW is the more nuclear option _ going for a much more widespread strike on the core plants in and around Detroit,” said Daniel Ives, an analyst with Wedbush Securities. To do so, though, some analysts say the union might have to act even more aggressively. The union’s thinking appears to be that by striking both vehicle production and parts facilities, it will force the automakers to negotiate a relatively quick end to the strike, now in its second week. By expanding its strike from three large auto assembly plants to all 38 parts distribution centers of GM and Ford, the UAW risks angering people who might be unable to have their vehicles repaired at service centers that lack parts. Yet the UAW’s emerging strategy also carries potentially significant risks for the union.

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