Perfect Storm? UAW Strike & Government Shutdown

Perfect Storm? UAW Strike & Government Shutdown
September 21, 2023
In Q4 2021, the peak of the supply chain strain, economists and analysts told us it would be a slow path to recovery, unless we experience a new X factor.

Fast forward to today: 
The United Auto Workers (UAW) are on strike against the Detroit 3 - could this be that X factor?
Some analysts say that a US government shutdown is likely by Sept. 30th (a Y factor?).
With new plants shuttering for much longer than six weeks, the new post-COVID operating environment could affect fleets in multiple ways: 
  • Supply chains are still tied together tightly. This is affecting suppliers and could expand beyond paint shops to suppliers that fleets rely on for parts, upfits, and transport. 
  • “Fleet vehicles’ length in service has already been stretched, so there’s not much room to extend that service life while waiting for vehicles,” said one FMC executive. 
A government shutdown does not have a direct correlation to vehicle inventory levels like a strike. But there are broader implications. 
With a protracted shutdown, these factors, among others, could have a spill-off effect on fleets in some form: 
  • Essential services such as TSA screenings and air traffic control would continue, but wait times and flight schedules would be affected.
  • Government services related to transportation are also deemed essential, but customer service at the federal government will likely be slowed. 
  • The bigger picture involves the economy in general and a shutdown’s effect on unemployment rate, GDP, government loan programs, and the cost of borrowing. 
In this new normal with so many other macro factors causing anxiety, a double whammy of the UAW strike and government shutdown could erode confidence and affect fleets and transportation in untold ways. 
Full Article by Chris Brown, Automotive Fleet
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