As the UAW strike continues, GM faces stockouts on repair parts. Dealer lots are getting low on some models as well.
Before the looming strike, GM built up to an average of 77 days of supply of cars on dealer lots. The typical days of supply is 60-65 days of inventory on dealer lots.
Video Spotlight: In tentative UAW deal, GM trades cash bonuses for future flexibility
This post is based on the NBC News article, Bad luck if your GM car needs spare parts or a repair, as UAW strike continues into its fifth week, by Paul Eisenstein, October 14, 2019, and the YouTube video, In tentative UAW deal, GM trades cash bonuses for future flexibility, by PBS News Hour, October 17, 2019. Image source: Shutterstock / Syda Productions
1. Today’s vehicle manufacturing is based on lean/JIT systems. How much leverage does UAW have in negotiations today compared to yesteryear?
Guidance: Remind students that vehicle manufacturing in the 1970s did not embrace quality management, lean/JIT, or many other common practices of today’s operations. This is a good opportunity to review the development of modern operations. Given that lean/JIT is time-dependent, it is reasonable to argue that UAW is in a better position to negotiate today than in the past when cars were made-to-stock and inventory levels were kept higher.
2. This strike is likely to be the beginning of more labor force disruption given the expected growth in electric vehicles, the rise in manufacturing technologies such as robots, and GM’s intention to build more electric vehicles in the next decade. What should GM and other vehicle manufacturers do about supplying repair parts to the market for existing models?
Guidance: This is a challenging question and will likely require a review of the electric car market forecasts and manufacturing technologies. The key is to recognize that there will be disruptions with the labor force given the UAW will not want to lose jobs due to electric car production and robots.
However, the spare parts inventory required to service existing non-electric vehicles can be decoupled from the new vehicle manufacturing problem created by more union strikes. Students should consider outsourcing repair parts manufacturing as a way to avoid using UAW labor. Is this even possible? Does the UAW extend into the suppliers as well? This question should help students research a little about the UAW and consider the UAW as part of the overall strategy to make and repair vehicles as the industry transforms itself in the next decade.