UAW strike
A potential United Auto Workers strike against the Big Three automakers would put a dent in railroads’ motor vehicle and parts volume – the traffic segment that’s shown the most growth this year as overall rail volume has declined.
The UAW has set a midnight deadline tonight for a strike at Ford, GM, and Stellantis, with the union and automakers far apart on wages, pensions, cost of living adjustments, and profit sharing. Yesterday UAW President Shawn Fain said the union would strike at selected plants first, followed by others if talks with the automakers don’t make progress.
So far this year motor vehicles and parts have accounted for 3.2% of U.S. rail traffic, according to Association of American Railroads data. The segment is up 13.4% so far this year, while overall U.S. traffic has slumped 4.8%, according to the AAR.
Norfolk Southern directly serves just over half of all light vehicle production in the U.S., with the Big Three accounting for 30% to 40% of the railroad’s automotive volume, CEO Alan Shaw said at the FTR Transportation Intelligence conference yesterday.
“There are finished vehicles waiting to be moved. So we could see normal volumes on us for a week to 10 days before it has any impact,” Shaw says of a potential strike.
Auto sales have rebounded this year from the computer chip shortage that began during the pandemic and crimped production. Last month S&P Global Mobility projected that auto sales this year would be 15.4 million units – its highest level since 2019 and an 11.6% increase from 2022.
Last year the Big Three accounted for 43% of U.S. auto sales.
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