Strike, strike, strike! No, we’re not talking about baseball. It seems like every industry has workers going on strike lately, and who can really blame them? It’s not like many workers are UNDERPAID these days. After COVID-19 and remote work became more common, people realized how much their mental health takes priority over working long hours and getting paid less than their worth. It’s a domino effect that’s leading to more people being unhappy and more workers pushing back. The most recent strike, the port strike on the East and Gulf coasts, will also affect the auto industry.

The last strike to affect the auto industry was the UAW Strike. Lasting for almost two months in 2023, employees of many automotive manufacturing plants walked out and demanded better pay. Large automakers like Ford, Stellantis, and General Motors saw an estimated $40-60 million loss in production profit per week the UAW Strike went on. It was a heavy hit, but it forced some people to wake up and pay workers fairly. The 2023 Writers Guild of America strike followed, and now the people behind overseas shipments are taking action.

Starting October 1, 2024, negotiations between the International Longshoremen's Association broke apart. It was clear employers were once again refusing to agree on better pay. This led to 45,000 port workers walking away. This strike is going to affect 36 ports across America, and could cost the U.S. economy as much as $5 billion per day as imports come to a stop. Major ports along the Atlantic and Gulf of Mexico coasts will get hit the hardest, but it also means imported goods such as vehicles, components, produce, and consumer goods will not be making it to shore.

Some suppliers and buyers were already preparing for this. It didn’t just come out of the blue. In August and September, shipments were accelerated to give the industries that would be affected a bit of a buffer between the end of supply shipments and production resources. However, the longer it lasts, the more scarce resources will become.

"The big problem is the uncertainty in this…If you think it's going to end in two weeks, you probably just put two weeks of inventory in place. But if you think it's going to last four weeks, well, four weeks is a lot of inventory to hold." - Dan Hearsch, Americas leader of the automotive and industrial practice at AlixPartners

These shipment delays could again lad to assembly plants and Tier 1 supplier factories shutting down. Assembly plants in the U.S. run by Mercedes-Benz, BMW, and Volkswagen could feel the brunt of this first, relying on parts shipments from Europe. Even with the push to make more automobiles in America, many domestic brands still get some components overseas, and they too will feel the after effects of this strike. Simultaneously, should it last several weeks, it could also provide an opportunity for the same automakers affected by the UAW Strike to make use of their excess inventory and keep afloat – that means General Motors, Stellantis, and the Ford Motor Company could actually benefit from this.

Hurricane Helene also did a number on assembly plants, specifically in North Carolina. Now imagine all the seamen travelling through that storm to make shipments on time. No wonder they’re fighting for more pay. Their lives are on the line with every major storm and hurricane that passes through between June and November. If they were to disappear, their families and loved ones need to be taken care of, and it’s not like we can rely on fat cats lining their pockets to care one bit. These people need to be paid more so they can save more and provide for their families should they perish at sea. It’s grim, but true.

Some say the strike could end as soon as it began with political pressure on employers and the union to reach an agreement. What politics have to do with this, who knows? Then again, Joe Biden made an appearance during the UAW Strike and stood alongside workers in the picket lines. If the President gets involved, the things get serious. Hopefully this time, the orange clown will stay out of it, and we can get these port workers paid what they’re worth.

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Photo Source/Copyright: Reuters