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Home / Blog / THE EFFECT OF THE UNITED AUTO WORKER STRIKE ON FLEETS

The Effect of the United Auto Worker Strike on Fleets

Category:gps fleet tracker

smarketingOctober 31, 2023

The United Auto Workers (UAW) union has been on strike against the three most recognized auto manufacturers - General Motors, Ford, and Stellantis - since September 15th. It started with 13,000 workers leaving three assembly plants in the Midwest, but now, it has expanded into a countrywide labor movement. The worst part is that this happened right when vehicle supply chains were returning to normal.

The real cause

So, why did the UAW go on strike? It did so, hoping to negotiate better wages and improve job security for its members. The first demand of the UAW is an increase in wages by approximately 40%. Citing old instances of inflation, the $21 billion in collective profit for the three auto brands, and ever-rising CEO pay, the UAW reasons that this payment increment is mandatory to the lives of its members and feasible for the said vehicle brands. The Big Three (three brands combined) agreed to offer a hike of 20%, which the union rejected.

Furthermore, the UAW wants to reinstate cost-of-living adjustments (COLAs). During the financial crisis (2008), which led the USA to get off the backs of Chrysler and GM for $17 billion, these workers gave up all protections. Today, the union wants all the inflation countermeasures reestablished to protect the members from every economic turbulence of the future. In September, GM, Ford, and Stellantis gave COLA proposals to the UAW, but the union dismissed all. In fact, the president of UAW, Shawn Fain, was highly skeptical when he expressed his thoughts about the Big Three's proposals.

Latest updates:

  • 22nd September 2023 - 5,600 UAW workers from 38 parts distribution centers of General Motors and Stellantis joined the strike group, pressurizing the nation's largest domestic auto manufacturers further into complying with the union's demands.
  • 29th September 2023 - Around 6,900 workers from Ford's Chicago and General Motors' Delta Township manufacturing plants join forces with the agitators. Almost 25,200 employees, or 17% of UAW members covered by expired contracts with the Big Three, are now part of the strike.
  • 11th October 2023 - UAW workers shut down Ford's biggest plant and stopped production of pickup trucks with little warning, in a sharp escalation of the four-week targeted strike against the Detroit Three automakers.

The result of the strike

Now that the Big Three has reduced the production of vehicles and parts, fleet businesses need to prepare to face higher prices and extended delivery times. Both domestic and global supply chains are still recovering from the disruptions suffered during the pandemic. In such a situation, only a few active manufacturing plants will not help prices and availability return to normal quickly.

Of course, an increase in prices and delays in orders will not be as drastic as the circumstances faced by fleets during the pandemic. Currently, the UAW coordinates work stoppages at designated locations operated by GM, Ford, and Stellantis. It means that instead of stopping or impeding production, these brands are still manufacturing vehicles and parts. So, if the UAW sticks to this strategy, fleet managers will likely have to pay more and wait longer when obtaining automobiles and spares, but not in large quantities.

That being said, the repercussions will be severe if the current strike escalates further.

Options for fleet managers

If the strike affects the supply significantly, fleet managers will inevitably see some of the vehicle procurement problems that were rampant during the pandemic. As the only way to compensate, you may need to hold onto the automobiles in your fleet longer than you initially planned. In other words, you must extend the life of your aging vehicles.

  1. Keep tabs on DVIRs
  2. Driver Vehicle Inspection Reports (DVIRs) form the first line of defense to safeguard fleet vehicles from costly breakdowns. A GPS fleet tracker that can analyze the condition of an automobile via the OBD-II port can give fleet managers an all-inclusive report on every issue affecting it.

    However, defects recorded in DVIRs often go unaddressed if the fleet manager does not deem them serious enough. The truth is that a seemingly innocuous flaw can lead to equipment failures in the future. Naturally, kicking the can is not the best option.

    Fleets with aging vehicles should definitely keep a close eye on their DVIRs to respond to failed items as quickly as possible. Fleet tracker devices help fleet managers monitor their DVIRs and observe trends.

  3. Stick to OEM guidelines for more mileage and less maintenance
  4. When a person grows older, doctors advise them to visit more frequently. Simultaneously, Original Equipment Manufacturers (OEMs) recommend vehicles be serviced more regularly after reaching a specific odometer reading. OEM guidelines typically suggest that particular maintenance actions be conducted on mileage intervals, such as oil changes every 3,000 miles or yearly brake inspections.

    By following these recommendations, fleet managers can avoid minor wear and tear from turning into costly breakdowns and keep the vehicles running longer.

    Fleet management platforms can help fleet managers stay on top of increased mileage maintenance intervals by automatically reminding them of due services.

  5. Monitor TCO
  6. Nearly every fleet business tracks the expenses of acquiring new vehicles, but only a handful of establishments record how they spend in maintaining the automobiles over the years. As a result, these companies fail to see how they waste money on vehicles that need replacing. The absence of Total Cost of Ownership (TCO) visibility is particularly problematic when dealing with aging vehicles owing to greater maintenance requirements.

    Thankfully, fleets of all sizes can easily track this metric by using fleet management solutions. One of the most significant benefits of such a platform is its ability to document every expense associated with a vehicle in the fleet and report TCO in real time. This information lets fleet managers make more informed decisions concerning automobile usage and replacement policies.

  7. Use CPM to delegate assets
  8. Despite all the metrics fleet managers should get familiarized with, the Cost Per Mile (CPM) stands out. The CPM value is derived from dividing a vehicle's Total Cost of Ownership (TCO) by the distance it has covered. Upon calculating the CPM of an automobile, a fleet manager can better understand the costs of completing specific jobs with that vehicle. With this knowledge, fleet managers can enhance profitability by assigning assets based on the CPM value.

    For example, if the job demands a lot of traveling, dispatching an automobile with a lower CPM will be much more cost-effective than using another with a higher CPM. After all, old vehicles are more likely to have a high CPM. As such, fleet managers can leverage this fact to assign jobs closer to where they are stored.

  9. Temporary hires
  10. Strikes are always detrimental to businesses, with one of the most prominent risks being losing clients combined with a veritable volume of business to competitors. After all, you will not have enough people or a trained workforce to oversee all organizational aspects during the strike.

    Since hiring new people amid an employee walkout is controversial, you may consider temporary or contractual hires to fill the posts until the labor dispute is resolved. If you know how long this dispute may continue, you can hire workers as per this period.

  11. Driver appreciation
  12. There are several ways of improving driver loyalty that can dissuade a strike and enhance working conditions for fleets. As the manager, you can't control the stipulation in arbitration or the labor terms during a strike, but you can use your fleet and job outlook to make all the difference.

    Keep a positive relationship with your drivers to eliminate negativity, keep communications transparent, offer coaching, ensure a comfortable working environment, review performance, and reward them. Leverage incentives, such as pay raise, health benefits, bonuses, company holidays, retirement packages, and paid time off.

  13. Respectful onboarding
  14. During strikes, one can only hope to reach a compromise with the company and its drivers agreeing upon a fair deal. As the manager, you should ensure a seamless transition when drivers return to work.

    Welcome them again respectfully and acknowledge the changes that may come from arbitration. Fleet operators should keep the workplace environment positive and engage drivers to curb workflow disruptions while preventing future conflicts.

    This strategy should get the business rolling again and put all disputes in the past.

A solution to industrial walkouts

To make vehicle management a breeze, fleet managers only need the right fleet vehicle tracker, fleet management software, or these combined. With such technologies, one can consolidate all asset-related data into a single source. From logging assignment histories to storing documents and uncovering critical fleet usage metrics, digitizing the approach to fleet management can profoundly enhance operational efficiency.

Sources:

  1. https://www.fleetio.com/blog/importance-of-maintenance-for-aging-vehicles
  2. https://www.commercialtrucktrader.com/blog/2023/08/09/tips-for-managing-a-commercial-fleet-during-a-strike/
  3. https://www.reuters.com/business/autos-transportation/uaw-workers-fords-kentucky-truck-plant-strike-2023-10-11/

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