Canadian Auto Workers union could cause U.S. dealers to run out of cars

Article by Christian Andrei, on September 18, 2012

It would take less than a month for U.S. dealerships to run out of Dodge Grand Caravans and Chevy Impalas if the strike by the Canadian Auto Workers union continues. The contracts that CAW has with Ford Motor Co., General Motors and Chrysler Group were set to expire at 11:59 p.m. tonight. The union had threatened that if they don’t arrive at new agreements, the three automakers would be facing a strike.

As of Sept. 14, no agreements had been reached. Around 20,000 CAW workers at nine of Canada’s component and assembly plants are involved in the negotiations. Last week, the CAW sent its members a leaflet that stated that the three companies seem to be “fixated” not just on cost containment but also on big concessions that would significantly affect its members.

If the triple strike occurs, it would be the first time for Canada's auto sector. It would put a stop to the auto production of the Detroit 3 in Canada, together with the production of engines and other parts that both Canadian and U.S. auto plants use. If the CAW proceeds with the strikes, it could be estimated from looking at the inventory levels that Chrysler and GM dealers would be affected the earliest.

Notably, the vehicles in shortest supply are the most in-demand among fleet customers. As of Sept. 1, GM’s dealerships and its delivery pipeline had 121,393 unsold Chevy Impalas – approximately a 25-day supply. Chrysler said that it had a 27-day supply with its 131,723 Grand Caravan minivans. UAW Canadian plants produce cars for 22 nameplates. Of this figure, just four other vehicles had less than a two-month supply. These are the Chevrolet Equinox crossover with a 41-day supply; Chrysler's Town & Country minivan with a 49-day supply; and Ford's Edge and Flex crossovers with each having a 54-day supply.

Topics: canada

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