Board of Governors of the Federal Reserve System

Figure 1. The Dynamics of the 2019 UAW Strike

Figure 1 shows the evolution of U.S. production, sales, and inventory levels for GM (blue line) and all other automakers (red line) around the time of the 2019 strike; GM was the only automaker affected by the strike at that time. All variables are normalized by the levels in August 2019, the month preceding the beginning of the strike; the charts show their evolution from 3 months before to 6 months after the beginning of the strike. The shaded gray area denotes the duration of strike. As work stoppages affected the entire GM assembly network, GM production dropped close to zero (left panel). The cutbacks in production, in turn, led to smaller but still notable declines in sales (middle panel) and inventory levels (right panel). After the strike ended, production levels quickly returned to levels comparable with other automakers and even increased beyond that, suggesting that there was possibly some make-up of strike-related production losses at GM plants. Sales also rebounded after the conclusion of the strike and reached higher levels compared with other manufacturers. GM’s inventory levels dropped significantly during the strike and remained low after the strike ended, as make-up production appeared not to have been sufficient to both satisfy increasing sales and rebuild inventories after 6 months from the beginning of the strike.

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Figure 2. The Dynamics of the 1998 UAW Strike

Figure 2 shows the evolution of U.S. production, sales, and inventory levels for GM (blue line) and all other automakers (red line) around the time of the 1998 strike; GM was the only automaker affected by the strike at that time. All variables are normalized by the levels in May 1998, the month preceding the beginning of the strike; the charts show their evolution from 3 months before to 12 months after the beginning of the strike. The shaded gray area denotes the duration of strike. The 1998 strike started with a walkout at a GM parts supplier, but it quickly cascaded and ended up forcing production to stop at nearly all GM assembly plants (left panel). The production stoppage caused inventories to drop (right panel) despite also significant declines in sales (middle panel). After GM and the UAW reached an agreement, production levels quickly rebounded and, for several months, ran at higher levels compared with other automakers. This allowed GM to rebuild inventories after the strike even as sales also recovered.

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Figure 3. The Dynamics of the 2023 UAW Strike

Figure 3 shows the evolution of U.S. production, sales, and inventory levels for the Detroit Three (blue line) and all other automakers (red line) around the time of the 2023 strike. The 2023 strike affected Ford, GM, and Stellantis—commonly referred to as the Detroit Three. All variables are normalized by the levels in August 2023, the month preceding the beginning of the strike; the charts show their evolution from 4 months before to 4 months after the beginning of the strike. The shaded gray area denotes the duration of strike. The targeted nature of the strike, which by October had affected only 36 percent of Detroit Three production, translated into a more limited drop in production compared with previous episodes (left panel). Similar to previous strikes though, the disruption in production was accompanied by a decline in sales (middle panel). The evolution of inventory levels around the 2023 strike is, however, somewhat different than in past episodes. Inventory levels at the Detroit Three did not decline relative to the months preceding the strike, although they increased at significantly slower rates compared with other manufacturers.

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Figure 4. Market Shares for the Detroit Three

Figure 4 presents the market shares in production (dark green line) and sales (teal line) of the Detroit Three—that is, Ford, GM, and Stellantis—since 1990. Those market shares have started significantly declining since the late 1990s, with the rise of foreign automakers. In 2022, the Detroit Three represented almost 50 percent of production and 40 percent of sales.

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Figure 5. Day’s Supply in the Auto Sector

Figure 5 compares days’ supply, a measure of the number of days of sales in inventory, for the Detroit Three (green line) and for the overall auto sector (black line) since the first quarter of 2015. Before the COVID-19 pandemic started, the Detroit Three automakers had around 80 days’ worth of sales in inventory. Days’s supply for all auto manufacturers declined dramatically in 2021 following the significant sector-wide struggles with semiconductor shortages and supply-chain disruptions. Over the past two years, automakers have rebuilt a large portion of their inventory, and the Detroit Three automakers have been especially successful in increasing their days’ supply; by the second quarter of last year, the Detroit Three had close to 60 days’ worth of sales in inventory.

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Figure 6. Implications for Prices and Wages

Figure 6 presents the implications for vehicle prices (left panel) and wages for workers employed in the motor vehicle sector (right panel). In both panels, the shaded gray area denotes the UAW strike. To evaluate whether the strike had an impact on prices, we compare the levels of new and used vehicle prices at the beginning of the strike with the levels seen shortly after the strike ended. As new and used vehicle prices were even a little below mid-September levels, we conclude that the effect of the strike on vehicle prices was muted. The right panel of figure 6 compares one-month changes in average hourly earnings around the UAW strike across three sectors: motor vehicles, manufacturing, and the private sector. Between January and October of last year, wage growth in the motor vehicle sector (bright blue) was broadly in line with wage growth in manufacturing (dark blue line) or the private sector (teal line), although more volatile. Since October of last year, however, wage growth in the motor vehicle sector shows a significant acceleration compared to the manufacturing sector and the private sector; the timing of this acceleration suggests that the strike may have been a contributing factor.

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