Major auto manufacturers are closely watching the port strike spanning the East and Gulf coasts, and they've implemented contingency plans to minimize its potential impact on production.
For the first time since 1977, the International Longshoremen's Association (ILA) and its 45,000 dockworkers went on strike at dozens of ports that collectively handle about half of the country's seaborne imports. The union is demanding better wages and restrictions on port automation, and negotiations are at an impasse with the U.S. Maritime Alliance (USMX), which represents port employers.
ILA President Harold Daggett has signaled the union is willing to persist in its strike to get its demands even if it means inflicting broader damage on the U.S. economy. "I’ll cripple you," Daggett said about the effects of the strike in a September interview. "I will cripple you and you have no idea what that means. Nobody does."
Although the strike has just started, it has the potential to threaten production of cars given that East and Gulf Coast ports are major destinations for imported auto parts. Delayed cargo deliveries would potentially affect automakers' inventory levels and could also hinder the availability of critical components. In response, automakers are exploring alternative shipping routes, increasing local sourcing and adjusting production schedules.
East and Gulf Coast ports handle a significant amount of shipments of cars and auto parts, particularly at the Port of Baltimore. (Photo by Kevin Dietsch/Getty Images / Getty Images)
Here's how several leading automakers are handling the current situation:
"Stellantis is closely monitoring the situation at a number of U.S. ports. The Company is taking the necessary actions to mitigate any potential impact to production or our ability to deliver vehicles to our customers. There has been no impact to our operations at this time," a Stellantis spokesperson told FOX Business.
"Regarding the strike, we've been monitoring the situation for several months, and are updating our teams daily. We have a task force in place to mitigate impacts to our production and aftermarket support as much as possible. Their work has included identifying critical components, working to secure additional stock in advance, coordinating with our supply partners on their own contingency plans, and finding alternative shipping routes," a Volvo spokesperson told FOX Business.
The ILA union is seeking higher wages and protection from automation in its stalled negotiations with port employers. (Photo by MARK FELIX/AFP via Getty Images / Getty Images)
"Regarding the port strike, we are monitoring the situation closely, but it is too early to speculate on potential impacts, if any," a Ford spokesperson told FOX Business.
"We are carefully monitoring the situation and have contingency plans in place. We will continue to work to mitigate any significant impact to our operations and will make adjustments as needed," a GM spokesperson told FOX Business.
"We are monitoring the situation closely and developing countermeasures to minimize any impact to our customers and dealers," a Toyota spokesperson said in a statement to FOX Business.
The ILA's strike has impacted East and Gulf Coast ports from Maine to Texas. (Photo by Spencer Platt/Getty Images / Getty Images)