Relief for Detroit Auto Dealers as UAW Strike Settled

By Anna Zim­mer­mann | UConn Jour­nal­ism
Decem­ber 11, 2023

Joe Lung­hamer, Pres­i­dent of Joe Lung­hamer Chevro­let, in Decem­ber 2023 joined the rest of Detroit in their col­lec­tive sigh of relief as the loom­ing uncer­tain­ty dis­si­pates from his show­room in Oak­land Coun­ty, Michi­gan.

Fol­low­ing the con­clu­sion of the Unit­ed Auto Work­ers strike, spir­its in Detroit are high. With the hol­i­day sea­son just ahead, a $1,500 bonus for UAW mem­bers, and the threat of pos­si­ble wors­en­ing eco­nom­ic tur­moil has van­ished, the peo­ple of south­east Michi­gan are relieved that the strike has been rat­i­fied.

Ten­sions were high amid the strike. In Michi­gan where 20% of the work­force is in the auto­mo­tive indus­try accord­ing to the Detroit Region­al Cham­ber, deal­ers, such as Mol­ly Williams, the Chief Oper­at­ing Offi­cer of Mat­ick Auto­mo­tive Group, agree that it can be chal­leng­ing nav­i­gat­ing cus­tomer and even employ­ee rela­tion­ships. She explains how the employ­ees are also cus­tomers and pos­si­ble UAW mem­bers or sup­port­ers. This makes stay­ing as neu­tral and unbi­ased as pos­si­ble when explain­ing why it may take longer for their vehi­cle to be repaired extra­or­di­nar­i­ly impor­tant.

Accord­ing to MarkLines, the Auto­mo­tive Indus­try Por­tal, GM saw a 7% decline in sales and Stel­lan­tis saw an 11.5% decline in sales for Octo­ber. Williams spec­u­lates a pos­si­ble rea­son that buy­ers held off was because of the uncer­tain­ty in the mar­ket as well as the UAW cus­tomers who were only liv­ing off the $500 union pen­sion per week and need­ing to save.

With what Ander­son Eco­nom­ic Group esti­mates is a total of $10.4 bil­lion in over­all eco­nom­ic loss­es from the strike that began on Sep­tem­ber 15, there was an expec­ta­tion that Detroit auto deal­ers were hit hard. The eco­nom­ic loss­es include lost wages to work­ers, lost earn­ings for the Big Three, also known as GM, Ford, and Stel­lan­tis, lost sup­pli­er wages and earn­ings, and busi­ness loss between deal­ers and cus­tomers. AEG esti­mates that there were over $2 mil­lion in eco­nom­ic loss­es just from the deal­ers, cus­tomers, and oth­er mis­cel­la­neous indus­try loss­es.

When dis­cussing the decline in inven­to­ry, Williams notes that there was not a decline in vehi­cles. She explains that this is because the union was most­ly on strike at parts stock­ing cen­ters and did not strike plants mak­ing vehi­cles until the end of the strike. How­ev­er, she says that she saw about a 20% decline in inven­to­ry, main­ly regard­ing parts; “For parts, we saw a big decline. Each day we would order parts and would not get them for 60 days,” she said.

Despite being in the heart of Motor City where the auto­mo­tive indus­try is at the pulse of the city’s eco­nom­ic suc­cess, the ram­i­fi­ca­tions of this strike did not take out Detroit’s GM auto deal­ers as it had dur­ing the 2019 strike.

Accord­ing to Lung­hamer, dur­ing the 2019 UAW strike, deal­er­ship park­ing lots sat emp­ty, there was no inven­to­ry, parts were on hold for months, and cus­tomers sat on the side­lines. Unpre­pared for the impact of the strike, it was dif­fi­cult for car deal­ers to recov­er. How­ev­er, this time around Lung­hamer describes it as being “a lot more busi­ness as usu­al”.

While the impacts of the 2019 strike were detri­men­tal to car deal­ers all over the coun­try, a strike would nev­er go on long enough to shut down deal­er­ships. Williams explains that the strike would either be solved, or the gov­ern­ment would get involved before it would ever reach that point. She notes that fix­ing people’s cars, as well as emer­gency vehi­cles is a big deal and the gov­ern­ment would man­date work­ers to get them basic things to con­tin­ue to stay oper­a­tional, even if they couldn’t get new vehi­cles.

“Each strike is dif­fer­ent. Each strat­e­gy from the UAW to the Big Three is dif­fer­ent. They strike to get what they need but also not to debil­i­tate the busi­ness. It is so inter­est­ing how both sides pre­pare to cre­ate as lit­tle down­time as pos­si­ble but allow pub­lic pos­tur­ing to get the best deal pos­si­ble,” said Williams.

Lung­hamer explained how it was almost “strange” how nor­mal things felt in Detroit dur­ing the strike after how detri­men­tal it had been in 2019. How­ev­er, Williams explains how being locat­ed in Detroit gave them a leg up this time, say­ing if she could be any­where else dur­ing the strike “I’d rather be here.”

Williams says that being in Detroit, sur­round­ed by the auto­mo­tive indus­try and in close prox­im­i­ty to the Big Three head­quar­ters, allowed auto deal­ers in the area, includ­ing her own, to have access to infor­ma­tion before any­one else in the coun­try knew about it.

“It was eas­i­er for us. We had greater knowl­edge and insight. We had access to infor­ma­tion that oth­ers weren’t get­ting. So once we were in it, we had way bet­ter intel… We had been prep­ping for six months” says Williams. She explains that all of this wasn’t nec­es­sar­i­ly infor­ma­tion direct­ly from head­quar­ters, but from the com­mu­ni­ty around her such as her neigh­bors, col­leagues, and friends.

Because Detroit auto deal­ers were aware that the UAW might go on strike before most, they were able to stock parts in prepa­ra­tion. Williams explains, “We ran a report, tried to fig­ure out what we had a lot of, and ordered it so that we would have stock of it if they did this. Because they’ve done it in the past”.

“It’s real­ly a local sto­ry. We’re all a fam­i­ly. Wher­ev­er you go in the world, the car busi­ness is just the car busi­ness… except Detroit,” said the CEO of Mat­ick Auto­mo­tive, Karl Zim­mer­mann.

The auto­mo­tive cul­ture in Detroit is unlike any­where else in the world. It’s your neigh­bors, your co-work­ers, your cus­tomers, and your fam­i­ly. And if you’re in Mol­ly or Joe’s posi­tion it’s what pre­pared you, because that’s what fam­i­ly does.