Alert Impact of UAW Strike on GM - September 17, 2019 - LMC Automotive
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Alert
Impact of UAW Strike on GM
September 17, 2019UAW Strike – Potential Impact to GM
• On September 15, 2019, the UAW declared a national strike on General Motors,
leading to roughly 46,000 hourly workers to walk off the line at 11:59 p.m. This is the
first national strike since 2007. The two sides are at odds over wages, benefits,
investments, job security and temporary workers.
• The strike impacts over 30 manufacturing plants in the US, including 12 vehicle
assembly plants and eight engine and transmission plants.
• LMC Automotive estimates that a strike affecting only US assembly plants would cost
GM 7,700 units of lost production per day, while this would approach over 43,500 units
if it were to last a week.
• Since powertrain and parts plants in the US are also affected by the strike, there is
potential that vehicle production in Canada and Mexico could also be impacted. LMC
estimates that a strike affecting all vehicle assembly plants in the region could cost
GM up to 12,400 units a day and 68,500 units per week.
Plant Daily* Weekly* Notable Vehicles
Arlington 1,200 7,170 Chevrolet Tahoe, GMC Yukon
Bowling Green 60 280 Chevrolet Corvette
Fairfax 860 4,300 Chevrolet Malibu, Cadillac XT4
Flint Truck 890 5,360 Chevrolet Silverado HD, GMC Sierra HD
Fort Wayne Truck 1,220 7,320 Chevrolet Silverado, GMC Sierra
Hamtramck 140 690 Chevrolet Impala, Cadillac CT6
Lansing Delta Township 790 4,760 Buick Enclave, Chevrolet Traverse
Lansing Grand River 290 1,450 Chevrolet Camaro, Cadillac CT5
Orion 260 1,300 Chevrolet Bolt, Chevrolet Sonic
Spring Hill 900 4,500 Cadillac XT5, Cadillac XT6, GMC Acadia
Springfield 80 400 Chevrolet Express, Chevrolet Savana
Wentzville 1,000 5,980 Chevrolet Colorado, GMC Canyon
US Total 7,690 43,510
Ingersoll Car 710 3,580 Chevrolet Equinox
Oshawa 1 180 870 Chevrolet Impala
Oshawa 2 430 2,140 Chevrolet Silverado, GMC Sierra
Canada Total 1,320 6,590
Ramos Arizpe 1,030 5,170 Chevrolet Blazer, Chevrolet Equinox
San Luis Potosí 1,110 5,540 GMC Terrain, Chevrolet Trax
Silao 1,290 7,730 Chevrolet Silverado, GMC Sierra
Mexico Total 3,430 18,440
NA Total 12,440 68,540
* Based on planned September and October output
© 2019 LMC Automotive Limited, All Rights Reserved. 2Powertrain Impact
• GM produces 6,000 engines and 3,900 transmissions daily in the US. If the strike lasts
a week, this would result in a loss of production of 29,800 engines and 19,500
transmissions in the US alone.
• Given the high reliance on engines and transmissions from Mexico and Canada for
US installation, GM’s powertrain operations in those countries will eventually be forced
to slow or stop production.
• If the strike impacts all of GM’s North American engine and transmission plants, the
daily production loss could be as high as 12,900 engines and 13,400 transmissions, or
a weekly loss of 64,400 engines and 67,000 transmissions.
Engine Plant Daily Weekly Engine Families
Tonawanda 2,530 12,650 CSS, LGE, Gen V, Gen VI
Spring Hill 370 1,850 CSS, SGE, L850, Gen VI
Moraine 750 3,750 DMAX
Flint South 560 2,800 CSS+, SGE
Romulus 1,690 8,450 HFV6
Bowling Green 50 250 HP V8, Gen V, Gen VI
US Total 5,950 29,750
Ramos Arizpe 1,910 9,550 Gen V, CSS
St. Catharines 2,310 11,550 HFV6, Gen V
Toluca 1,860 9,300 CSS, SGE
Silao 840 4,200 Gen IV
NA Total 12,870 64,350
Transmission Plant Daily Weekly Transmission Families
Romulus 410 2,050 10L
Toledo 3,480 17,400 6L, 6T, 8L, 9T
US Total 3,890 19,450
Ramos Arizpe 680 3,400 CVT250
San Luis Potosi 3,400 17,000 6T, 9T
Silao 4,630 23,150 6L, 8L, 10L
St. Catharines 800 4,000 6T
NA Total 13,400 67,000
© 2019 LMC Automotive Limited, All Rights Reserved. 3Inventory Analysis
• General Motors currently has the largest inventory of any automotive manufacturer in
the US, with nearly 30% higher volumes than the next OEM, Ford. As of September
1st, GM was holding roughly 800,000 units of inventory, with more than 90% of the
current inventory being produced in North America. That translates into a 77-day
supply, which is significantly higher than the industry average of 61 days.
• The majority of GM’s inventory consists of 515k units of Chevrolet vehicles and 165k
units of GMC vehicles. SUVs and Pickups make up an even split of the vehicles
currently on hand, with each bodytype accounting for 40% of inventory.
• GM has clearly attempted to stock the high volume/high profit models, as the
Chevrolet Silverado Pickup has the highest inventory at 200k units (93-day supply),
followed by the GMC Sierra Pickup at 78k units (84-day supply). The Chevrolet
Equinox SUV rounds out the top three, with 68k units of inventory (63-day supply).
Days Days
Brand Inventory Bodystyle Inventory
Supply Supply
Buick 98 66,200 Car 73 139,100
Cadillac 89 47,700 SUV 72 316,400
Chevrolet 72 515,600 Van 65 23,500
GMC 84 165,500 Pickup 88 321,100
GM Total 77 795,000
Source: Wards Intelligence
• Following the announcement of the UAW strike, the International Brotherhood of
Teamsters stated that they would stand in solidarity with the UAW by not delivering
vehicles to dealerships as long as the strike continues. This limits GM’s access to its
full inventory and ability to sell vehicles.
• The probability of an extended strike lasting longer than a week is increasing as the
two parties remain far apart on several key issues. GM believed that their initial offer
included a number of concessions that the UAW was seeking. However, their proposal
was rejected and a quick resolution does not appear likely at this time.
• Previously, the 1998 UAW strike on GM lasted 54 days and cost the automaker $2
billion, which would equate to $3.1 billion in today’s dollars – or over a third of their
2018 net profit. A strike lasting this long has the potential to cost GM 500,000 units in
lost production, which would quickly deplete their available inventory. In this situation,
GM intenders would ultimately either delay purchases or move to competitor brands,
which could result in 100,000 lost US sales in the remainder of this year.
• A strike of that magnitude would impact the build-outs and start-ups of models,
including the Chevrolet Corvette, Cadillac CT5 and Cadillac CT4. Model year
changeovers could be delayed, as GM would need to continue to utilize the inventory
of parts for outgoing models. In the case of the much anticipated new mid-engine
Chevrolet Corvette, retooling at the Bowling Green plant is planned to begin in early
October, with the start of production set to begin in early December. An extended
shutdown could push out the start of production to January 2020.
© 2019 LMC Automotive Limited, All Rights Reserved. 4About LMC Automotive
LMC Automotive is the premier automotive forecasting company and has an
exclusive focus on the industry and an understanding of the dynamics that
drive it. With offices in Oxford, Detroit, Shanghai, Bangkok and representation
in Germany, Brazil, Japan and Korea, we combine more than 30 years of
experience in macroeconomics and demand analysis, with a global network of
ground-level, intelligence-gathering expert analysts creating unique
perspectives and insights. We help our clients make sense of what is
happening today, while planning for tomorrow.
LMC’s principal area of activity is the global forecasting of vehicle sales,
production and powertrain and coverage is provided of both Light and Heavy
Vehicles.
The automotive industry is facing an extraordinarily rapid period of technology
evolution, particularly in the area of alternative propulsion systems. LMC is
taking the lead in the analysis of the impact of these changes and is unique in
offering several services that specifically forecast future demand and
production for hybrid, electric and fuel cell powered vehicles.
Our core services include:
• Global Automotive Production Forecast (monthly) by model, plant,
platform, SOP/EOP with a 7-year forecasting horizon
• Global Automotive Sales Forecast (monthly) by model, bodytype with a
12-year forcasting horizon
• Global Light Vehicle Powertrain Forecast (quarterly) by model, engine
(IC, BEV, etc), transmission, driven wheels with a 7-year forecasting
horizon
• Global Hybrid & EV Forecast (quarterly) sales by model and propulsion
system with a 12-year forecasting horizon; optional Battery & eMotors
Module (model level, xHEV technologies)
Special Reports
• Long-Term Outlook for AV and Electrification to 2050
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