UAW Has Upper Hand vs. Automakers: Schenker

The Labor Shortage Is Real

The US labor force is at a record high of 167.8 million people. The unemployment rate, meanwhile, remained low at 3.8% in August. And only about 1% of workers are currently collecting unemployment, he said.

The total percentage of people working has not recovered to pre-Covid levels. But that figure is deceptive. That’s because the largest group of people not working are those 55+ years old, Schenker said.

“Why does the UAW have leverage?” he asked. “There is no one to hire and there is no one collecting unemployment.”

“Given the labor market data, if I were the auto companies, I would resolve it sooner rather than later,” he added.

Price Impact Limited, as Long as the Strike Isn’t Protracted

Joseph Pickard, ISRI chief economist and director of commodities, provided some context to the current stoppage. He said strikes were nothing new in the auto industry, with many having occurred since the first half of the last century.

What does the strike mean for metallics? Pickard estimated that automotive represented about 26% of US steel demand and 35% of domestic aluminum demand.

“Traditionally, there have been price downturns in ferrous in or around these auto strikes,” Pickard said. But such dips impacts are typically transitory.  

Recall that the most recent UAW strike in 2019 lasted for six weeks, which was par for the course. The average strike lasts five weeks. That’s based on 30 years of data and among strikes with more than 1,000 workers in the past 30 years, according to an NBC analysis of Bureau of Labor Statistics data.

But Pickard also noted that nine of the 20 longest strikes of the past three decades lasted longer than a year.

Another thing that has changed in the last quarter century: market share. In 1999, the Big Three automakers had a combined market share of 68%. It stood at just 40% in 2023, Pickard said, citing figures from the Center for Automotive Research (CAR) in Ann Arbor, Mich.

The UAW began its strike at three plants last week. The union UAW expanded its strike on Friday, calling for work stoppages in parts distribution plants across the country at General Motors and Stellantis.