A prolonged coordinated strike by the United Auto Workers union against the Detroit Three automakers could cut production by thousands, potentially pushing up vehicle prices and exacerbating supply-chain disruptions, analysts said.
The auto industry is on edge as the current four-year contracts between the UAW and General Motors, Ford Motor and Stellantis for hourly US workers expire on midnight Sept. 14, after which the union’s chief has warned of a possible coordinated strike.
New vehicle prices may rise by less than 2% if the strike lasts about two weeks, according to automotive consulting firm J.D. Power.
“Everyone’s going to see higher prices regardless of the company you buy from if it (strike) continues for more than two weeks,” said Tyson Jominy, vice president, data and analytics at J.D. Power.
He added that companies such as Toyota, Honda and Volkswagen may also benefit if the domestic brands quickly run out of inventory to sell.
Jominy said the used car market, which quickly follows the underlying trends of the new market, may see a greater impact on prices if there are fewer substitutes for buying a vehicle.
CFRA analyst Garrett Nelson said strikes at all three automakers would cut North American auto production by 150,000 units per week, resulting in higher vehicle prices as inventories deplete.
That would mean an end to the trend of cooling vehicle prices in recent months, at a time when inflation continues to pinch US consumers.
“Even if the UAW continues to negotiate beyond its deadline, the lack of a deal and threat of a strike should discourage auto dealers from offering discounts on their existing inventory and drive an uptick in vehicle prices,” J.P. Morgan insurance analyst Jimmy Bhullar said.
Deutsche Bank previously estimated that a strike would hit earnings at each affected automaker by about $400 million to $500 million per week of production.
GM and Ford are also in the midst of a multi-billion dollar EV transition and brokerage Wedbush estimates adoption of some major UAW proposals to result in an increase in the price of electric vehicles rolling out over the next 12 to 18 months.
“(Ford CEO Jim) Farley and (GM CEO Mary) Barra both face some tough decisions ahead and find themselves with the back against the wall,” Wedbush analyst Dan Ives wrote in a note.
The resulting disruptions from any strikes are also likely to benefit EV leader Tesla, industry experts said. Some dealers are also expected to gain from shortages of vehicles.
“The big thing to keep in mind (is) that (the) UAW strike could help stabilize our margins, which is quite nice,” auto retailer Lithia Motors’ CEO Bryan DeBoer said during a July analyst call.
Another large dealer, AutoNation, previously said it had built up inventories from domestic manufacturers, which should provide some cushion.
However, UAW president Shawn Fain rejected the idea that worker wages were responsible for auto prices going up in the last few years.
In a video released on Thursday titled “Here’s what the Big Three and the corporate media’s NOT telling you about car prices,” Fain said “corporate greed” was responsible for rising car prices.
“In the last four years, the average price of a new car is up 30%, meanwhile auto worker wages have risen a meager 6%,” Fain said.
Donald Trump has suggested Russia’s war in Ukraine could have been “settled very easily” as he criticised Kyiv’s negotiation skills.
In comments after an extraordinary meeting between senior American and Russian officials on Tuesday morning in Saudi Arabia, the US president said of Ukraine: “They’ve had a seat [at the table] for three years and a long time before that.
“This could have been settled very easily. Just a half-baked negotiator could have settled this years ago without, I think, the loss of much land and without the loss of any lives and without the loss of cities that are just laying on their side.”
While touting his own negotiation skills, Mr Trump also said he was “more confident” about a peace deal after Tuesday’s talks, attended by US secretary of state Marco Rubio.
While speaking from Mar-a-Lago in Florida, Mr Trump also said he would not oppose seeing European peacekeeping troops stationed in Ukraine as part of a peace deal with Russia.
He also repeated a proposal that Ukrainian leader Volodymyr Zelenskyy hold elections in Ukraine as a condition of peace.
‘Not a Russian thing’
“We have a situation where we haven’t had elections in Ukraine, where we have martial law, essentially martial law in Ukraine, where the leader in Ukraine, I mean, I hate to say it, but he’s down to 4% approval rating.”
He added: “If Ukraine wants a seat at the table, wouldn’t the people have to say – it has been a long time since they had an election?
“That’s not a Russian thing, that’s something coming from me and coming from many other countries also.”
Mr Trump also told reporters he and Russian leader Vladimir Putin had discussed Ukraine before the full-scale invasion in 2022.
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“President Putin and I would talk about Ukraine, and it was the apple of his eye, I will tell you that,” he said.
“But he never, there was never a chance of him going in. And I told him: ‘You better not go in, don’t go in, don’t go in.’ And he understood that and he understood it fully.”
From Trump to Zelenskyy – it was goodbye
In another place, at another time, it would have been: “You’re fired.”
Donald Trump coined it differently when he was asked about Volodymyr Zelenskyy, but the sentiment was the same.
Asked about suggestions that Russia wanted elections in Ukraine as part of a peace deal, the US president replied: “I hate to say it, but he’s down to a 4% approval… when they want a seat at the table, wouldn’t the people of Ukraine say it’s been a long time since we had an election? That’s not a Russia thing, that’s coming from me and other countries.”
From one president to another, it was goodbye. A farewell to the notion that Trump respects Zelenskyy as an equal player in peace negotiations.
Mr Trump added he will probably meet with Mr Putin before the end of the month.
At Tuesday morning’s talks, US and Russian officials agreed to restore embassy staffing and establish a high-level team to negotiate peace in Ukraine in another sign of the significant American change in diplomatic relations with Moscow.
Mr Rubio said the two countries “need to have vibrant diplomatic missions that are able to function normally”. The US and Russia also agreed to explore closer relations and economic cooperation at the meeting.
“Should this conflict come to an acceptable end, the incredible opportunities that exist to partner with the Russians geopolitically on issues of common interest and frankly, economically, on issues that hopefully will be good for the world and also improve our relations in the long term,” Mr Rubio said.
He added ending Russia’s war in Ukraine would require concessions from all sides.
The comments came as talks between Russian and US officials in Saudi Arabia ended – part of a remarkable US policy reversal after years of former president Joe Biden leading international efforts to isolate Moscow.
‘Very useful’ talks, Lavrov says
Speaking to reporters after the meeting, Russian foreign minister Sergei Lavrov said “the conversation was very useful”.
“We not only listened, but also heard each other,” Mr Lavrov said.
“And I have reason to believe that the American side has started to better understand our position, which we have once again outlined in detail, using specific examples, based on President Putin’s repeated speeches.”
US State Department spokesperson Tammy Bruce said even though Ukraine was not at the table on Tuesday, any actual peace negotiations will include the country.
Meanwhile, President Volodymyr Zelenskyy said his country will not accept any outcome from this week’s talks if Kyiv does not take part. No Ukrainian officials were present at the meeting.
Image: Inside Tuesday’s talks in Saudi Arabia. Pic: Reuters
Ukraine losing ground to Russia
The talks came as Ukraine is slowly but steadily losing ground against more numerous Russian troops in a grinding war that began nearly three years ago.
The Ukrainian air force said Russian troops launched a barrage of 176 drones at Ukraine on Monday night, most of which were destroyed or disabled by jamming.
One Russian drone struck a residential building in Dolynska in the Kirovohrad region, wounding a mother and her two children and prompting an evacuation of 38 apartments, the regional administration reported.
Four more residential buildings were damaged by drone debris in the Cherkasy region of Ukraine, according to local officials.
European allies left scrambling
Ties between Russia and the US had fallen to their lowest level in decades in recent years – a rift that had been widening since Russia annexed Crimea from Ukraine in 2014 and worsened after Moscow’s full-scale invasion in 2022.
At that point, the US, along with European nations, imposed a raft of sanctions on Russia and the allies have repeatedly expanded the measures to damage the Russian economy.
But the recent US diplomatic blitz on the war has sent Mr Zelenskyy and key European allies scrambling to ensure a seat at the table amid concerns that Washington and Moscow could press ahead with a deal that will not be favourable to Ukraine.
On Monday, France called an emergency meeting of European nations, including the UK, to discuss the war.
Saudi Arabia seeks to be diplomatic player
The meeting between the US and Russia on Tuesday at the Diriyah Palace in the Saudi capital of Riyadh also highlights de facto leader Crown Prince Mohammed bin Salman’s efforts to be a major diplomatic player, burnishing a reputation severely tarnished by the 2018 killing of Washington Post journalist Jamal Khashoggi.
Saudi state media described the talks as happening at the prince’s direction. Saudi Arabia has also helped in prisoner negotiations and hosted Mr Zelenskyy for an Arab League summit in 2023.
Mr Zelenskyy had been due to travel to Saudi Arabia this week but rescheduled it to 10 March, suggesting he wanted to avoid his visit being linked to the US-Russia talks since Ukrainian officials were not invited.
That the United States chose to hold talks with Russia about Ukraine without Ukraine sums up the power imbalance that is upending security assumptions for the whole of Europe.
Volodymyr Zelenskyy, the Ukrainian president, has consistently warned that Kyiv must have a seat at the negotiating table for any discussions about ending Vladimir Putin‘s war to have a chance of success. His European allies also want to have a voice.
Mr Zelenskyy, apparently by chance, had been due to embark on a pre-planned trip to the kingdom later that same day.
However, he decided to delay the visit to avoid the appearance of giving any kind of legitimacy to the bilateral encounter between Moscow and Washington.
Unfortunately for Kyiv, beyond noisy protest, it has very limited options when it comes to channelling the disruptive force of the Trump White House in its favour.
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The Ukrainian military remains hugely reliant on US weapons to fight Russia’s invasion and Mr Zelenskyy has made clear he would want an American element in any international security force that might be agreed upon to monitor a ceasefire – even though this is a role the US appears reluctant to fill and the Kremlin has said would be “unacceptable”.
It means Mr Trump has significant leverage over his Ukrainian counterpart which he will surely use to try to force through negotiations even on terms less favourable to Kyiv.
Please use Chrome browser for a more accessible video player
1:43
Ukrainians react to US-Russia talks
The US has already reportedly tried to make Ukraine sign away a large portion of its natural resources to pay for US support – an uncomfortable offer that Mr Zelenskyy has so far declined but an indication of the new transactional approach to US foreign policy.
Mr Trump has repeatedly vowed to end Russia’s war in Ukraine – even claiming during the US election campaign that he would do this within 24 hours.
But he never spelled out how.
The past week, however, has offered an indication of the direction of travel and it does not look good for Ukraine.
From unilaterally picking up the phone to Vladimir Putin to sanctioning such a high-level meeting with the Russians in Riyadh, the only currency that seems to matter to the White House is power and right now both Kyiv and its European partners are looking all too weak.
That the United States chose to hold talks with Russia about Ukraine without Ukraine sums up the power imbalance that is upending security assumptions for the whole of Europe.
Volodymyr Zelenskyy, the Ukrainian president, has consistently warned that Kyiv must have a seat at the negotiating table for any discussions about ending Vladimir Putin‘s war to have a chance of success. His European allies also want to have a voice.
Mr Zelenskyy, apparently by chance, had been due to embark on a pre-planned trip to the kingdom later that same day.
However, he decided to delay the visit to avoid the appearance of giving any kind of legitimacy to the bilateral encounter between Moscow and Washington.
Unfortunately for Kyiv, beyond noisy protest, it has very limited options when it comes to channelling the disruptive force of the Trump White House in its favour.
More on Donald Trump
Related Topics:
Spreaker
This content is provided by Spreaker, which may be using cookies and other technologies.
To show you this content, we need your permission to use cookies.
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You can change your settings at any time via the Privacy Options.
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The Ukrainian military remains hugely reliant on US weapons to fight Russia’s invasion and Mr Zelenskyy has made clear he would want an American element in any international security force that might be agreed upon to monitor a ceasefire – even though this is a role the US appears reluctant to fill and the Kremlin has said would be “unacceptable”.
It means Mr Trump has significant leverage over his Ukrainian counterpart which he will surely use to try to force through negotiations even on terms less favourable to Kyiv.
Please use Chrome browser for a more accessible video player
1:43
Ukrainians react to US-Russia talks
The US has already reportedly tried to make Ukraine sign away a large portion of its natural resources to pay for US support – an uncomfortable offer that Mr Zelenskyy has so far declined but an indication of the new transactional approach to US foreign policy.
Mr Trump has repeatedly vowed to end Russia’s war in Ukraine – even claiming during the US election campaign that he would do this within 24 hours.
But he never spelled out how.
The past week, however, has offered an indication of the direction of travel and it does not look good for Ukraine.
From unilaterally picking up the phone to Vladimir Putin to sanctioning such a high-level meeting with the Russians in Riyadh, the only currency that seems to matter to the White House is power and right now both Kyiv and its European partners are looking all too weak.