Analyst: UAW Strike Could Trigger Recession

Estimated read time 2 min read

And it could get even worse.

If you haven’t been following the developing situation between the United Auto Workers and the Detroit Big Three, just know it’s not going well. The union and automakers have been supposedly engaging in negotiations, however that quickly devolved into threats and theatrics. Now, it looks like a strike is coming, and one industry analyst is warning that might be the straw the breaks the economy’s back.

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Karl Brauer, Executive Analyst for iSeeCars, sees a UAW strike not only hurting the Big Three but also the US economy, which is sitting on the brink of a significant recession. He points out that 40 percent of new vehicles sold in this country come from the domestic brands, constituting a significant contribution to the nation’s GDP.

What’s more, a UAW strike might reverse the trend of falling new and used car prices. That’s bad news for anyone who’s been holding out in hopes that later this year or in early 2024 they can snatch up a good deal.

“Average new car supply has recently rebounded to approximately 60 days, meaning a two-week strike could cut domestic dealer supply by 25 percent and a one-month strike could halve it,” said Brauer in a prepared statement. “This would undoubtedly be reflected in higher prices for U.S. models, along with a related price increase for competitive brands.” 

Brauer believes the result of a UAW strike will be quite different than the covid shutdowns and supply chain issues. Instead of the whole market coming to a temporary halt, it would only be the domestic brands. He argues that could lead to an increase in market share for certain foreign brands, weakening Ford, GM, and Stellantis at least in the short term.

UAW has quite the list of demands for automakers that includes a 40% pay increase at a time when the industry is facing mounting losses. When Stellantis, which owns Chrysler now, told the union bosses that such concessions could quickly push the company into bankruptcy, UAW’s president threw the automaker’s proposal into a garbage can on camera. Things have just unraveled from there.

Images via Ford, Stellantis, GM

Steven Symes

Steven Symes is an accomplished automotive journalist with a passion for all things related to cars. His extensive knowledge and love for the automotive world shine through in his writing, which covers a diverse range of topics.

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