Auto workers strike could hit consumers — if it lasts long enough

It’s hard to say where people will feel the biggest ripples from the United Auto Workers’ strike that started Friday, according to Ray Gibney, a professor of human capital and management at Penn State University-Harrisburg.

For one, get ready for some sticker shock.

Union leaders say labor accounts for about 5% of the cost of a new car, while others put the number closer to 15%, Gibney said.

If automakers have to make financial concessions to the United Auto Workers, they likely will pass along the increased cost to car buyers.

“There’s not going to be a way to completely eat (the cost),” Gibney said. “So, consumers will pay more. The question is ‘How much more?’ ”

Selection also might be a problem, something exacerbated by an already thin post-pandemic selection of vehicles.

“It was already difficult to get a car,” Gibney said. “And, now, there’s going to be an increase in cost.”

But as the strike begins, some area car dealers are saying their inventories are good, and they’re hopeful the strike won’t last long enough to have an impact.

“We’ve got inventory, and I think that Ford has been prudent in their planning,” said Shults Ford owner Richard Bazzy, who has dealerships in Harmar, McCandless and West Mifflin. “We just operate day to day, business as usual. We’ve done nothing different. We’ll continue to stay the course.”

Bazzy said he has not been through a strike in his 25 years in the business.

“I really do not see this being able to last,” he said. “I think that it will hurt too many people, and I really care only about having everyone back at work.”

Chris Kalmar, vice president of Kalmar Chevrolet in Gilpin, said he’s not seeing a problem right now because of supply in the pipeline, and because the union is targeting just one General Motors factory, which builds the Chevy Colorado and GMC Canyon pickups.

“Hopefully, it won’t last long,” he said. “Any disruptions aren’t good.”

Greg Turchetta, vice president and partner in Tristar Auto Group, said his understanding is the union is pinpointing certain factories to make an impact by targeting higher-volume vehicles.

“In our case, that’s light-duty trucks and mid- and full-size SUVs,” said Turchetta, whose group has dealerships in Kittanning, Indiana, Blairsville, Somerset and Uniontown.

He said the strike’s impact will be tied directly to its length.

“If it progresses beyond 60 days, it’ll have a big impact in terms of inventory availability,” Turchetta said. “You’ll see a big dip in ground stock. And even when it gets resolved, there’ll be more lead time to replenish those vehicles.”

Kalmar said the “Big Three” American automakers are on an uneven playing field with other manufacturers whose plants in the U.S. are nonunion.

“They’re trying to hold on where they can to remain profitable; otherwise, you’ll probably see those companies put more plants out of the country, where they can afford to build them,” he said.

On the broader level, Pennsylvania could see economic impacts.

If the automakers slow or stop production, companies such as Autoneum — an automotive parts manufacturer that employs 700 workers in Bloomsburg, a small Columbia County town near Wilkes-Barre — get hurt, Gibney said.

Supply chains are all intermingled, said Bill Mohler, president of Sendell Motors in Hempfield. While none of his brands — Subaru, Mitsubishi and Volkswagen — are directly impacted by the strike, it could have an impact on suppliers and result in shortages with any brand.

“There are 5,000 to 8,000 pieces to a car, and, if you’re missing one, that’s a problem,” Mohler said.

Gibney said industries such as steel and coal, both present in Southwestern Pennsylvania, could be affected by the strike. But it remains unclear how much of a hit they will take, he said.

No one from the state Department of Labor and Industry was available Friday for comment.

A prolonged strike would impact everything from wages and overtime in related industries, to dollars those workers spend on their lunch break at a local shop, according to Gibney.

“If it goes on for a week, there will be minimal impact,” he said. “If it goes on for two months, there’s gonna be a problem.”

Elected leaders, such as President Joe Biden, might get involved in the UAW strike discussion because of their record supporting unions and the strike’s impact on the economy.

“Rightly or wrongly, Biden will be held accountable if there are economic effects,” Gibney said.

The strike, in time, also could impact the used car market, Turchetta said.

“In the absence of new cars to sell, used cars will become very scarce because it’ll create a hole in the supply chain,” he said. “So we’re watching it every day and trying to manage our inventory closely.”