In an automotive industry still struggling with the tail end of semiconductor chip shortages and supply chain disruptions following COVID-19, GM may experience more logistic pressure if a threatened strike of UPS workers materializes.
Research by Anderson Economic Group (AEG) shows the UPS strike could cost upwards of $7 billion in total economic losses, giving it the biggest economic impact of any strike in the past 100 years.
A strike against UPS by the Teamsters Union would result in 340,000 workers walking off the job for an estimated period of 10 days, AEG says. The halt in deliveries would affect not only individuals but also businesses, including everything from small single proprietorships heavily dependent on shipping availability to major corporations such as The General.
The research firm also notes that deliveries would not be readily switched to alternative services such as the United States Postal Service (USPS) or FedEx. The strike would lead to “lost parts and goods within just a few days” and inflict “significant and lasting harm for small businesses” according to AEG CEO Patrick Anderson.
AEG remarks that the strike is on the same scale as the 2019 UAW strike against GM. The research firm successfully predicted the outcome of that strike and used the same methodology for its current predictions.
Even without the potential UPS disruption, GM continues to face logistical problems. According to GM Chair and CEO Mary Barra, speaking at the beginning of July 2023, logistics and delivery are the biggest obstacle the automaker is grappling with at the moment.
GM has large numbers of vehicles produced, but unable to reach dealerships with both trucking and railcar shortages preventing delivery. The automaker has planned to reduce future production to prevent the backlog from worsening as thousands of vehicles remain parked next to factories where they were produced.
As logistics struggles continue and the UPS strike looms, potentially creating more major distribution hurdles as its effects reverberate outward through the transportation sector, GM has even floated the idea of buying 400 heavy-duty trucks to carry out its own deliveries.
The UPS walkout will begin on August 1st if a deal isn’t reached by July 31st, with Teamsters president Sean O’Brien declaring “we’ve organized, strategized, now it’s time to pulverize.”