Earlier on October 1, local time, tens of thousands of workers at more than 30 terminals on the U.S. East Coast and Gulf Coast went on strike. According to Automotive News, the strike could have a significant impact on the automotive supply chain.
In the 12 months ending June 30, 2024, the ports affected by the strike handled $37.8 billion worth of automotive imports, according to S&P Global Market Intelligence (S&P Global Market Intelligence). Bill Long, CEO of the Motor & Equipment Manufacturers Association (MEMA), noted that this figure does not include auto parts, and if the strike continues, shortages could lead to plant shutdowns or layoffs.
One of the busiest U.S. ports for auto imports is the Port of Baltimore. In 2023, the port imported 847,158 vehicles, making it the highest-volume U.S. auto importer of any port for the 13th consecutive year, according to Maryland.
Barclays analyst Dan Levy said 70 percent of U.S. auto parts imports come from the affected ports, though companies may add some inventory as the risk of a strike has been apparent for some time. Peter Sand, chief analyst at shipping pricing platform Xeneta, believes that “we expect the strike to last five to seven days until the government intervenes …… but routes to Europe and Asia are likely to be affected for at least January and February next year. “
Jack Hollis, head of North American sales for Toyota, said the strike would have a wide-ranging impact on the auto industry. “Yes, it will affect everyone.” Researchers at Barclays said they expect import business at European automakers such as BMW, Mercedes-Benz, Volkswagen and Volvo to be affected, though relatively high inventories will offset the immediate impact.
Hyundai Motor America is in “close contact” with its logistics subsidiary Hyundai Globis and “is developing contingency measures to ensure stable shipments and deliveries of automobiles,” said Hyundai Motor America CEO Randy Parker. “.
A GM spokeswoman said the company is “closely monitoring the situation and has contingency plans in place” and will work to mitigate any impact on its operations. Ford is also monitoring the situation closely and said it was too early to predict the potential impact. The company said in a statement that so far its operations have not been affected.
Stellantis also said its operations have not been affected and said “the company is taking the necessary actions to mitigate any potential impact of the strike on production or vehicle delivery operations.”
MEMA’s Long revealed that the organization has been invited to attend a briefing at the White House on October 1 and has urged the Biden administration and members of Congress to “engage in a bipartisan response to this crisis.” Suzanne Clark, president of the U.S. Chamber of Commerce, also urged President Biden to exercise his authority to stop the strike, and that “it is unconscionable to allow a contract dispute to take such a toll on our economy.”
On September 29, Biden stated that it did not intend to intervene, and on September 30, the U.S. government reiterated that it would not consider using the federal Taft-Hartley Act to stop the strike.