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?).
EFFECT OF PROTRACTED STRIKE
ON FLEETS (X 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. 
EFFECT OF GOVERNMENT SHUTDOWN
ON FLEETS (Y FACTOR?)
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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