2023-09-17 14:59:34
The unprecedented strike which is disrupting the activities of three American automobile manufacturers could have consequences for Canadian dealerships, warns a columnist from the Auto Guide.
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The powerful United Auto Workers (UAW) union is demanding wage increases of up to 40% over four years, a “pharaminous” increase, according to Antoine Joubert.
Although multinationals GM, Stellantis and Ford are posting record profits, we must also focus on the industry’s struggles during the COVID-19 pandemic.
“We are asking for increases which are very high. You should know that, yes, it’s true, car manufacturers have made interesting profits in recent years, but the entire industry has changed its mind,” he mentioned in an interview on the airwaves of LCN.
AFP
The latter clarifies his point of view by emphasizing that almost all automobile manufacturers have ceased production of low-end vehicles.
“We saw small cars disappear, we saw basic models disappear. The average price of a vehicle sold in the country in 2023 is a little over $64,000 […] This largely explains why profits have exploded,” adds Mr. Joubert.
The Auto Guide columnist also emphasizes that the American unions working with workers in American automobile factories “are very strong.”
AFP
This factor would explain the already higher wages for American workers compared to their colleagues in Asia.
“There are many retirees who must be paid handsomely today. It is very expensive. An American car manufacturer is no longer capable of selling a vehicle for $25,000, there is no profit to be made. It is mainly because of the cost of employees and retirees that we find ourselves in this situation,” he testifies in an interview with Frédérique Guay.
The factories affected by the strike, located in the states of Ohio, Michigan and Missouri, will certainly experience slowdowns.
The Stellantis site in Ohio, which produces almost all Jeep brand vehicles, will be “completely shut down”.
So, car dealers should expect a drop in deliveries.
“The first to be cut in terms of inventories are the Canadian dealers. Obviously, selling a vehicle in Canada is less profitable than selling it in the United States. We prefer to supply American dealers. We will suffer enormously,” he warned.
TVA News
Consumers looking for full-size pickup trucks may be faced with offers that are a little less attractive when it comes to the prime rate.
“We have quite a few full-size vans in inventory […] If there is a cessation of model manufacturing for an indefinite period, we will want to have an interesting inventory and therefore sell more expensive vehicles,” said Antoine Joubert.
The unprecedented strike could end with government intervention.
“Governments will certainly react to this, because the demands are downright unreasonable.”
*Watch the full interview with Antoine Joubert in the video above*
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