Minnesota factories, dealerships brace for trickle-down effects from UAW strike

With the auto industry just recently getting back on track from the repercussions of the pandemic, Minnesota vehicle dealers, parts makers and employees are concerned about a United Auto Workers strike at three key auto plants.

The UAW's action on Friday was "a warning shot," said Todd Olson, CEO of Minneapolis-based supplier Twin Cities Die Casting.

"If they do expand the strike, it could impact 20% of our total revenue," said Olson, whose company molds aluminum and magnesium parts for transmissions, clutches, mirror mounts and electric enclosures. "I will keep my fingers crossed that [the strike] doesn't get any worse."

UAW members walked out of the GM assembly plant in Wentzville, Mo.; the Ford Ranger truck and Bronco SUV assembly plant in Wayne, Mich.; and the Stellantis assembly complex in Toledo, Ohio. Union members want better wages and to restore pension benefits.

The actions already are having trickle-down effects. The union representing rail workers nationwide threatened to support the UAW strike and factories and car dealerships are bracing for a long haul.

"Today we are not affected. In one month, we will all be affected," said Tom Leonard, whose Fury Motors has 200 workers and sells Stellantis products such as Chrysler, Jeep, Dodge & Ram trucks in South St. Paul and Stillwater plus Ford vehicles in Waconia.

Leonard, chairman of the Minnesota Automobile Dealership Association, said about 200 dealerships in the state are in the same boat.

"We are very dependent on new shipments coming into us. [The Toledo Stellantis plant] makes a very critical, important product to us," Leonard said. After the pandemic, "we were just catching up and to have any kind of interruption will put us in a serious supply crunch in short order."

And it's not just dealers that could suffer.

There are railroads, massive vehicle transporting trucking firms, fueling stations and restaurants. The potential impact of a long UAW strike "is going to be very, very broad based," Leonard said.

If the UAW strike lasts 60 days or more, Olson said Twin Cities Die Casting will need to cut workers' hours. For now, he will move some of his 200 workers into equipment repair and building maintenance jobs at his plants in Minneapolis and Monticello in Minnesota and Watertown, S.D.

"We are in a bit of a better shape than some of our competitors. The ones that get hit harder are centered in Michigan or have a lot higher concentration into the Big Three," Olson said.

Alexandria Industries, an aluminum extrusion company, does not supply products to tier-one vehicle companies. But it makes aftermarket components and is worried a lengthy strike would hit the broader automotive industry.

"[We] have been watching this [strike] progress as this may impact their demands," said Alexandria Industries marketing manager Cindy Frederick. "We will continue to keep a pulse on things, by checking in with customers often. Because they all supply to owners of new and used vehicles, we anticipate that there won't be a large impact."

Dealerships, because they are directly affected, are more worried.

"It's not good for anyone, for those involved or for the people downstream. So hopefully this thing gets buttoned up so we can all happily go on with our lives," said Tucker Walser, a sales manager at the Walser Buick GMC dealership in Bloomington.

The UAW's limited strike is already on pace to affect supplies of the GMC Canyon and Chevrolet Colorados, both midsize trucks, Walser said.

If the strike is over soon, great, he said. "If not, then we are probably going to have some other models affected. This is going to impact us."

And it's not just Walser Automotive Group, the family-owned business that has roughly 2,000 workers and more than 30 dealerships in four states, including two Stellantis and three General Motors stores in the Twin Cities.

"This could turn into a major problem," said Paul Walser, Tucker's father and the co-owner of Walser Automotive.

"These kinds of things obviously have lots of tentacles and they reach everywhere and so many are impacted by it," he said. "You would hope they can figure out a path forward relatively soon because you don't want all of the damage to the innocent parties."

Paul Walser noted that the strike could disrupt newly recovered inventory levels and dealer product trading. It could also hurt parts suppliers, workers and advertisers.

"In the auto industry, we touch so many different people and companies. If you don't have cars, you stop advertising," he said. "Everybody that would normally be getting advertising revenue all of a sudden is impacted too. And it's the same for every supplier too and on down the line. So it's meaningful."

While dealers are cautious, Paul Walser said he doesn't expect Walser Automotive to increase prices.

Leonard at Fury Motors said there will be no layoffs. The labor market is too tight and it's been so hard to find enough workers that he can't envision anyone doing layoffs in response to the UAW strike. Eventually, everyone "will come to the table," he said.