The United Auto Workers strike finally began to take its toll on the Automotive MMI (Monthly Metals Index) as well as month-over-month steel prices. Regarding price drops, hot-dipped galvanized managed to suffer the most. And with the strike continuing to escalate, negotiations stagnating, and more and more layoffs occurring nationwide, the index faces massive bearish pressure in the immediate future.
Overall, the Automotive MMI dropped by 4.51%
Expert steel sourcing strategies, right at your fingertips. The Monthly Metals Outlook report is your ticket to saving the most amount of money possible in 2024. Check out a free 2024 sample copy and secure your subscription.
Mass Layoffs from Stellantis and Other Manufacturers
Jeep manufacturer Stellantis announced that it has laid off more than 500 employees at the Trenton Engine Complex, as well as a smaller number of workers in Indiana. The UAW strike, which led to storage difficulties and a lack of parts, proved the primary reason for the layoff decision. At the moment, 640 Stellantis employees are currently on temporary release due to the strike.
Other automakers have also witnessed impacts from the UAW’s ongoing protest. Due to the strike at the Chicago Assembly Plant, Ford requested that 71 employees of the Livonia Transmission Plant not report to work on Monday, October 9. Like Stellantis, Ford also experienced a scarcity of parts due to the strike. Ultimately, General Motors (GM) had to idle an assembly plant in Kansas, resulting in the layoff of around 2,000 workers.
Economic analysts estimate that the UAW strike has thus far cost the automotive sector $5.5 billion. Indeed, nearly 13,000 GM, Ford, and Stellantis employees took to picket lines over the past four weeks. The UAW has since criticized the Big Three automakers’ decisions to fire workers, with union leader Shawn Fain claiming that the Big Three are using the layoffs as a strategy “to put the squeeze on our members to settle for less.
UAW Strike Ramifications on Steel Prices
Ultimately, the strike continues to lower demand for auto steel, adding bearish pressure to already falling steel prices. Indeed, auto companies produced 6,030 fewer vehicles per day due to the UAW strike’s effects. The cost of the UAW strike reflects the 16 days that production was halted at one assembly facility in Wentzville, Missouri, which produces mid-size pickups. Because of the strike, Ford has had to let go of around 930 employees. Meanwhile, Stellantis released at least 370 employees in Ohio and Indiana. That said, it’s possible that the strike may eventually reduce steel availability and raise steel prices, though only time will tell.
Get a competitive edge in challenging steel market conditions. Learn game-changing steel industry insights by opting into MetalMiner’s free weekly newsletter.
Mack Trucks Workers Reject Contract Offer and Join Strike
After overwhelmingly rejecting a proposed five-year deal, thousands of unionized workers at Mack Trucks went on strike. According to the United Auto Workers (UAW), 73% of its members voted against the proposed agreement. The deal apparently included a 19% pay increase, a $3,500 ratification bonus, improved retirement benefits, additional vacation time for some employees, and a shorter time to reach top pay.
About 4,000 Mack employees represent the UAW in three separate states. According to UAW President Shawn Fain, several issues still need to be resolved, including clauses relating to salary, work schedules, benefits, and health and safety.
The latest strike is distinct from the UAW disagreement with Detroit’s Big Three automakers, General Motors, Ford, and Stellantis, as Mack Trucks belongs to Volvo. Since September 15, the UAW has been striking specifically against the Detroit Three automakers’ facilities, with around 25,000 of the 146,000 UAW workers participating. Ford agreed to enhance its salary increase to 23% over four years, potentially raising expectations for union members at Mack due to recent developments in their own negotiations.
The Mack arrangement also included an immediate 10% pay hike and nine more percentage points of compensation increases over the course of the five-year contract. When the UAW decided to strike, Mack Trucks President Stephen Roy said that the firm was “surprised and disappointed,” and that the action proved needless. In the past year, workers at FedEx and in the freight rail industry rejected tentative deals before later agreeing.
MetalMiner customizes price points, price forecasts and procurement solutions based on the specific metal type your company purchases. See MetalMiner’s full metal catalog.
Automotive MMI: Steel Prices and Other Price Shifts
- Hot-dipped galvanized managed to drop 8.34% month-on-month, leaving prices at $934 per short ton.
- US shredded scrap steel moved sideways, rising 1% in price. Prices could shift up due to shortages in shredded scrap steel resulting from fewer automotive workers in the workplace. Prices currently sit at $404 per short ton.
- Lastly, Korean aluminum 5052 coil premium over 1050 decreased in price by 5.71%, leaving prices at $3.80 per kilogram.
