The auto workers strike is hitting GM dealers' service departments: 'We’re buying up parts wherever we can get them'
By Nora Naughton Sept. 25, 2019 2:09 pm ET As a strike at General Motors GM 0.92% Co. persists through a second week, many vehicle owners are showing up at GM dealerships to find they are having to wait to get their cars fixed or serviced.The strike, already the longest nationwide walkout at GM since 1970, has brought production at more than 30 GM factories in the U.S.
“We’re right on the edge of it really getting nasty,” said Garry Clift, owner of Clift Buick-GMC in Adrian, Mich. The longer the work stoppage drags on, the more it will dent dealers’ finances because service departments are big revenue generators, auto retailers and industry analysts say. For the large, publicly traded dealership groups, parts and service accounted for 43% of their annual gross profits last year, according to Moody’s Investors Service.
The parts shortage is the result of two blockages. GM’s U.S. factory output has been suspended during the walkout, meaning many new parts aren’t being built. In addition, GM has more than 30 parts warehouses and distributions centers throughout the U.S. that are staffed by UAW workers participating in the strike. That is slowing the delivery process.
On the new-car lot, GM dealers headed into the strike with a healthy stockpile of cars, trucks and SUVs and aren’t seeing an immediate effect on sales. But some say if the strike continues past this week, they could start seeing shortages on some models, including GM’s big moneymaking trucks.Marc Verdi, of upstate New York, last week brought his Chevy Colorado to a nearby dealership after his check- engine light came on. His truck, he said, needed a new nitrous-oxide sensor.
“We’re waiting for transmissions, we’re waiting for suspension components, we’re waiting for fluids,” Mr. Landerway said. “I probably have 30-40 repair orders on vehicles with parts on order with no ETA.”
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