The strike by the Auto Workers Union (AWU) in the US is having a significant impact on the logistics infrastructure operated by the vehicle manufacturers. The trade union has already targeted the parts-distribution network of General Motors and Stellantis, with 38 cross-docks, depots and warehouses affected by strikes and apparently not functioning. Similar Ford facilities have not been subject to strikes as the UAW says that negotiations are proceeding more satisfactorily.
There have been strikes at assembly plants and some component manufacturers facilities but the UAW has been keen to avoid comprehensive action affecting the whole of the operations of the vehicle manufacturers whom they are negotiating with, as their union members would struggle to afford this. Rather the tactic has been to focus on specific parts of the vehicle manufacturers business. It is interesting that the UAW has selected the spare parts logistics operations, probably because they realise that the spare parts divisions are amongst the most profitable elements of the vehicle manufacturers business.
There are now rumours that GM and Stellantis are outsourcing operations to third-party logistics providers. The Wall Street Journal newspaper is reporting that it has seen a document that stated “ahead of the strike, Stellantis additionally leased a non-union warehouse and banked 30 days of inventory for 2,500 different types of parts”. The Wall Street Journal is also reporting that both General Motors and Stellantis had “devised plans for white-collar workers to staff the parts hubs so they could continue shipping components used for customer maintenance and repairs at dealerships.” Ford had made similar plans but has not had to implement them due to the continued operation of its facilities. General Motors seems to have admitted that its does have such “contingency plans”.
There are a number of questions that emerge form these reports. Perhaps the most interesting is who the logistics service providers who are offering General Motors and Stellantis the capacity to handle their aftermarket logistics. Any provider would have to be quite large as the volumes passing through such a network are considerable. To do so at short notice would be beyond the ability of most third-party logistics providers. Presumably any logistics provider capable of such a thing would be in a position to charge a substantial fee for doing so.
Author: Thomas Cullen
Source: Ti Insight