How the UAW Strike Affected Government Fleet Orders from the Big 3

Assembly lines are back online and work has resumed at production plants across the country for Ford, GM, and Stellantis. More than 45,000 United Auto Workers walked off the job for six weeks earlier in the fall after the union and the Big 3 initially failed to come to an agreement on the terms of their contracts.

On Nov. 30, the union announced that its members voted to ratify their new contracts across the Big 3. Almost two-thirds of voting members voted in favor of the agreements.

In the weeks since the strike ended, public sector fleet managers are likely wondering what trickle-down effect — if any — the strike had on their vehicle orders in an industry already suffering from supply chain constraints. Government Fleet asked reps for the Big 3. Here’s what they told us.

Ford: On Track to Reach Full Production Schedules

Ford President and CEO Jim Farley released a statement after the agreement between the automaker and the UAW was ratified. According to him, Ford is on track to reach full production schedules “in the coming days” at its assembly plants in Michigan, Kentucky, and Illinois that were affected during the strike.

Farley also noted that the company is addressing added costs brought on by the strike.

“It’s also imperative that we continue to attack cost and waste throughout our operations. The reality is that this labor agreement added significant cost, and we are going to have to work very hard on productivity and efficiency to become more competitive,” Farley said.

The UAW strike by Ford workers cut sales by about 100,000 vehicles and lost the company $1.7 billion, according to the Associated Press.

Farley also addressed the production of police vehicles— a segment of the industry that has been particularly heavily impacted by the supply chain crisis over the last several years. Existing orders are being prioritized, according to Farley.

“We understand how important this vehicle is to continue the vital mission of keeping citizens safe and we are supporting our customers to keep police fleets on the road,” Farley said.

The Chicago Ford Assembly Plant, where the Police Interceptor Utility is made, was one of several that halted production during the strike.

The Kansas City Assembly Plant, where the F-150 and F-150 Police Responder are made, did not halt production. The Dearborn Truck plant in Michigan, which also produces the F-150, did not close either.

GM: Working Hard to Meet High Demand

When asked what their response was to fleet customers concerned about potential vehicle delivery delays, a GM spokesperson told Government Fleet that its teams are “continuing to work hard to meet the high demand for our products,” including manufacturing and logistics.

GM suggests fleet customers reach out to their local dealership if they have questions about the status of their orders, because they can provide real-time updates.

In its reinstated Q3 earnings report, which took into account the impact of the strike, GM reported that the strike cost the company $1.1 billion, primarily from lost production.

Like Ford, GM plans to reduce costs where possible.

“We are finalizing a 2024 budget that will fully offset the incremental costs of our new labor agreements and the long-term plan we are executing includes reducing the capital intensity of the business, developing products even more efficiently, and further reducing our fixed and variable costs," GM Chair and CEO Mary Barra said. "With this clear path forward, and our strong balance sheet, we will return significant capital to shareholders."

Several assembly plants that produce popular government fleet vehicles temporarily shuttered during the strike.

In the strike’s final days, GM’s Arlington, Texas, Assembly Plant shut down production. That plant produces the Chevy Tahoe, Chevy Suburban, and GMC Yukon, some of GM’s popular large SUV models for public sector fleets.

The automaker’s Flint, Michigan, plant also paused production. That’s one of the plants that produces the popular Chevy Silverado pickup used by many government fleets.

Stellantis: “Minimal Impact” for Government Fleet Vehicle Plants

Stellantis Head of Government Fleet Sales and Operations Phil Bockhorn told Government Fleet that the production of government fleet orders continued “at a normal pace” throughout the strike period, enabling the automaker to maintain an order-to-delivery schedule consistent with pre-strike averages. Because of this, government customers have not experienced any strike-related delays.

“Fortunately, the UAW strikes had minimal impact on the Stellantis plants that produce the majority of vehicles destined for government fleet customers,” Bockhorn added.

Stellantis’ Ram 1500 plant in Sterling Heights, Michigan, did pause production for several days toward the end of the strike after a UAW walkout.

The Detroit Assembly Complex, where the Dodge Durango is made, did not close.

When there is a strike, Bockhorn said government fleet sales reps provide weekly email updates to dealers and key accounts, as well as daily phone calls and in-person visits when needed, to keep everyone in the loop.

“Our government fleet customers seemed to truly appreciate the transparency of Stellantis communications during the strike period, and our ability to maintain the production pace of their orders. Their continued demand for our vehicles has set us up for a record year in terms of total shipments,” Bockhorn said.

The UAW strike, as well as the Unifor strike in Canada, cost Stellantis about $3.2 billion in revenue, according to its Q3 earnings report.

When Government Fleet asked Bockhorn whether the automaker had to cancel any orders due to the strike specifically, he said no.

It’s unclear if any vehicle orders from Ford or GM have been canceled.

What’s Ahead for the Big 3

In the coming months, the automakers will continue to cut back where possible in an effort to minimize the economic impact of the losses they sustained during the UAW strike.

Despite the strike, new vehicle inventory volume reached 2.40 million at the start of November, its highest level since March 2021, according to Cox Automotive.

Jonathan Smoke, chief economist for Cox Automotive, reported to Automotive Fleet that delivery numbers are expected to increase as the year wraps up.

You can read more about Smoke’s conversation with AF here.

Vehicle prices are also likely to continue to rise as a result of the labor agreements.