Will Union Strikes Drive Up the Cost of Collision Repair?

Earlier this year in one of our industry webinars, I said the future of parts supply could be in the hands of the unions. I pointed out the potential for a west coast strike by the International Longshore and Warehouse Union (ILWU) and the resulting bottleneck of not getting parts from Asian manufacturing countries into the U.S. in a timely manner. I also briefly touched on the expiring contracts between the U.S. auto makers and the United Auto Workers (UAW). Now that six months have passed, where do we stand today? 

 Thankfully, a long term (5 year) agreement was reached with the West Coast Port Authority and the ILWU which means we won’t see a disruption in the import and distribution of OE and aftermarket parts coming through the ports on the west coast.  The situation with the United Auto Workers, however, has deteriorated. Incoming UAW president Sean Fain, on a Facebook livestream, decried the Stellantis proposal as a “slap in the face” before literally throwing the document in the trash. Days later, 97% of the UAW members voted for strike authorization, with a strike potentially beginning in mid-September. 

How will this affect the collision repair industry? Most domestic stamping plants are staffed by UAW workers and a ceasing of new panel production will be quickly felt. Conquest pricing for those panels will evaporate and aftermarket demand will increase. If a panel is not produced in the aftermarket, then recycled will be the only alternative if a new OEM panel is not readily available. Both of those market conditions will lead to inflating prices and therefore the overall cost of repair will increase, as could repair cycle time. 

A longer-term option for these car makers could be to move stamping outside the U.S. and therefore outside of UAW reach, but that is an expensive and time-consuming proposal. The best hope for the collision repairer is that a quick agreement is reached between the UAW and the impacted car manufacturers.