The UAW Strike, Toyota, and You: Who Stands to Benefit the Most?

September 28th, 2023 by

The UAW Strike, Toyota, and You: Who Stands to Benefit the Most?

As unionized workers walk out of big-named auto manufacturing companies by the thousands, customers are left wondering how they will be impacted by this, as the possibility looms that even non-unionized car companies, like Toyota, could be making some changes.

Presently, the United Auto Workers’ strike is in full swing, affecting more than 20 states across the country–including North Carolina. The strike is targeted towards The Big Three automotive companies: General Motors, Stellantis (Chrysler), and Ford, and this is the first time in history these three have been impacted by a strike at the same time. The strike came about at exactly midnight on September 14th, which is precisely when the union’s contract with the companies expired. The strike began with 13,000 workers walking out of each of the three assembly plants with a warning that more would be walking from other locations if significant progress in contract negotiations hadn’t taken place.

Unfortunately, not enough progress was made through these negotiations, and the UAW announced more walk-offs. As it stands, 362,000 auto workers are on strike. What exactly are they negotiating for? The UAW wants better pay and better benefits, citing that the CEOs of these companies have made historic profits as of late, yet the workers have received nothing.

The Effect on the Consumer

Now that we know why the strike is taking place, what about its effect on the consumer? The good news is that you will still be able to shop for cars, even for those being targeted by the strike. Though pressure is being put on The Big Three, dealerships will not be shutting down since they are individual franchises that are owned independently of the company whose logo is shown on the front dealership. That said, these dealerships may receive their car orders from the car companies involved in the UAW strike, so although most–if not all–dealerships currently have plenty of vehicles on hand, it might not be that way for long. Luckily, economists (such as Jonathan Smoke, a chief automotive economist) are saying that the impact of the strike on consumers will not be anything like what we experienced during the Covid pandemic and the shortage of computer chips that ended up shutting down the entire auto industry for a little while. Something else to note, car dealers also sell used cars, and plenty of these are still on hand. So, if the new flow of cars were to stop all of the sudden, dealerships will still have plenty of older vehicles available–even if older means by a year or so.

Thanks to the preparedness of auto dealers who have learned from previous periods of manufacturing crises, we–the consumers–may be able to skirt through this situation without much of a disruption.

The Non-Unionized

One thing to bear in mind is that not all automakers are unionized, and therefore are not all experiencing a strike at the moment. Toyota, one of the biggest, most trusted car companies in the world is not unionized and is still producing cars, trucks, and SUVs. Though the company is still in full production mode, it could be impacted by the UAW strikes to a degree. With the lack of production from The Big Three, there could be a period of time where there is a shortage of parts, even cars. This would leave a lot of The Big Three’s consumers left in the lurch, looking for a product.

Will these consumers begin shopping at Toyota? They might have to. And if this were to happen, Toyota could–not to say that it would–capitalize even more by raising prices. So a new group of consumers and more money being made overall. But, wait, there’s more! If non-unionized car companies raise their prices on vehicles, The Big Three will most likely follow suit and raise theirs as well once the UAW strike is ended (whenever that may be).

Only time will tell, but there is a clear risk of supplies being pushed down while prices go up, and in this situation it is the consumer who loses. Let’s hope negotiations are worked out soon.

 

Buy Now or Wait and See What Happens?

It’s a tricky spot to be in if you are looking at buying a car in the near future. How long these strikes will last, nobody knows. And even if they do end soon, when will we notice the lack of production that took place during the strike? Though you may not have been planning to start shopping yet, it could benefit you to trade in what you have now for that car you wanted later, while it’s still around.

Despite what is happening in the world of auto production, trading in a car still carries true monetary worth and can save you tons of cash on your new purchase. Best of all, the process of trading in a car for a new one is quite easy and straightforward.

The first step is to drive your car to Mount Airy Toyota and ask for some professional advice on how much money your car is worth and your best options for getting a new vehicle. You can then take the car you want to purchase for a test drive, and depending on how much research you have done already, yo can go over different trim levels, color options, etc.

Once you return from your drive, an offer will be made on the car you wish to trade in, and that cash can be applied to the car you hope to buy. If you accept and find yourself a nice car, the deal is concluded by signing over the title and getting you into your new one.

Another option is you can trade your car in for cash and take that money to a private seller, but there are two issues with this: 1) it takes more time and there is going to be more paperwork; 2) dealerships tend to give a bigger cash offer if you plan on buying your next one from them, and everything is done right there.

If you do decide to wait it out, keep in mind that these strikes are happening at specific factories that make a few specific models of cars. There is a chance that the car you want, or will eventually want, will not be impacted by any part shortages. Do also keep in mind that the longer the strikes go on, the more likely car prices are to go up.