UAW Strike Impact: Car Prices Set to Increase

The Cost of Strikes – Can Consumers Bear the Burden?

At the present time, it is noticeable that the automobile sector is going through some turbulence. These tremors could escalate and have a wide-reaching effect on an international scale.

At the present, tensions remain high between UAW (United Auto Workers Union) and the Big Three car makers – General Motors, Ford, and Stellantis – as labor strikes persist without any signs of resolution appearing imminent.

The car news hub RacerX is mostly known for focusing on American automobiles, performance cars and culture. However, they have recently come forward with some insight on the strikes and how it might aggravate an currently unbalanced car market.

The video appears to be visualizing the already determined facts and prompting inquiries. The labor action is impacting Stellantis’ Jeep Wrangler, Gladiator facility in Ohio, GM’s midsize truck and full-size van factory in Missouri, and Ford Bronco and Ranger factory in Michigan. In some cases, components warehouses together with assembly plants may be enduring the stir, thus potentially widening the reach of the industrial agitation across a vast region.

Dating back to 2008 at least, the UAW has laid out several requests of the Big Three automakers who gained a whopping $21 billion in profits during the initial half of 2023, as noted by RacerX.

Demands have been placed for an extensive wage rise of 40%, along with taking into consideration changes in the cost of living (COLA). Furthermore, a lowered work week of 32 hours and diminished primary-tier job term of 90 days are being called for, as well as assurances for safekeeping of employment and remuneration during U.S. car enterprises’ temporary closures due to refitting or modification to generate electric vehicles (EVs) – this is merely a brief list of the requests.

RacerX observes certain nuances, amongst them the egregious and disproportionate remuneration for top executives, such as Mary Barra’s “$29 million salary” in 2022 as GM CEO, and the escalating cost of automobiles – from 2012 to 2022, there has been an upsurge in the average cost of a new American vehicle of almost $20,000; which is drastically over the rate of inflation.

Auto producers are already offering deals such as a twenty percent pay raise and a four-year time frame for the first tier of salaries (in comparison to the current 8 years, but much longer than the UAW’s proposed 90-day term).

RacerX’s primary realization is that, given the current amount of car price increase, the strikes might further hike such tariffs and develop aftermaths in other realms as well as different parts of the world.

If automakers have to scrape together billions of dollars to fulfill the demands of striking personnel, the expenditure is potential to be borne by customers, thus bringing up prices even higher. Plus, the closure of parts factories may plausibly result in slowdowns and further increases in the cost of brand-new automobiles.