What would an autoworker strike mean for consumers?

The United Auto Workers Union (UAW) has set a Thursday strike deadline against the three U.S. auto manufacturers – Ford, GMl and Stellantis (Chrysler).

The union has reduced its demand for a 40% pay raise to a 36% increase but the two sides are still said to be far apart. A strike against all three companies would essentially shut down auto manufacturing in the U.S., though some foreign car companies with plants in the U.S. would continue to operate.

But after a pandemic that snarled supply chains, reducing vehicle output and raising prices, Karl Brauer, executive analyst at iSeeCars.com, says a strike would likely impact consumers in the market for a car or truck.

“Domestic brands make up 40% of U.S. market share, meaning a lengthy strike will undoubtedly impact market prices,” Brauer told ConsumerAffairs. “If inventory levels drop substantially at domestic dealers, prices for those models will rise, likely pulling competitive pricing up. Higher costs could further slow sales, with consumers already pushing back against today’s high car prices by seeking value in the used market.”

And that, no doubt, would cause used car prices to rise as well. During the pandemic used car prices hit a record high and only began falling in June. A shortage of new cars would probably lead to more used car sales, pushing prices back up again.

Car prices could go higher

Even if there isn’t a strike – or just a short one before a contract is reached – carmakers will have to pay union employees a lot more than they do now. The contract will cover the next five years but the union is demanding a large portion of the increase to be front-loaded.

After demanding 20% of the increase in the first year of the contract, the union now says sit would accept an 18% increase in the first year. Some of the higher labor costs would likely end up in the sticker price, though domestic manufacturers would have to be mindful of foreign competition.

New car prices are already as high as they have ever been. Kelly Blue Book reports the average transaction price (ATP) of a new vehicle in July of $48,334.

Mark HuffmanReporter

Mark Huffman has been a consumer news reporter for ConsumerAffairs since 2004. He covers real estate, gas prices and the economy and has reported extensively on negative-option sales. He was previously an Associated Press reporter and editor in Washington, D.C., a correspondent for Westwoood One Radio Networks and Marketwatch.

Read Full Bio