Leaders Need to Think Long-Term About the Impact of Striking Workers

Earlier in 2023, the Pacific Maritime Association finally struck a deal with longshore workers at the West Coast ports.  

The six-year agreement paved the way for a smoother future after a year and a half of disruption that had seen freight prices rise despite low demand from elevated interest rates. While this marked a happy resolution, it was just a single episode in one corner of an economy that had begun to reach a boiling point. 

Shortly before the West Coast ports resumed activity, Hollywood’s writers had gone on strike. The actors’ guild followed suit shortly after, and those labor battles proceeded to define the business landscape over the summer. As these strikes play out, one thing is certain. We’re going to have an interesting (and likely sparse) season of entertainment content ahead as the shock of the months-long delay hits the entertainment sector. 

Laborers have gotten restless in another area of the economy, too, including another key area: transportation and manufacturing. The auto-workers strike may not come with celebrity-laced picket lines, but it has a bigger potential to impact the economy moving forward, and leaders should be preparing for those shockwaves now, especially when it comes to their supply chains. 

The State of the UAW Strike

On September 15th, the United Auto Workers union chose to strike against the “Big Three” automakers. In the second half of that month, the group orchestrated walkouts and holdouts against Ford, General Motors, and Stellantis (which owns Chrysler).  

Strikes are never preferable for anyone involved. They put pressure on workers to make ends meet while stressing out company resources and holding back future growth. It’s always best when the two sides can come to an agreement before a strike deadline hits.  

In this case, though, the long-term repercussions of the ongoing strike could hit particularly hard. Why? We’re in one of the worst automaker markets in recent history.  

The stresses and strains on the system started a few years ago during the pandemic. Car parts were hard to find, workers were quarantined at times, and some facilities were even temporarily commandeered to create ventilators. 

Since then, while life has resumed to a degree, the pressure on the auto industry has stayed elevated. Used cars, in particular, have remained expensive, with the availability of parts often cited as a primary issue. 

Some have pointed out that the UAW strike could eventually push the overall supply of automobiles down and, consequentially, drive prices up. That’s to be expected.  

But in the short term, there’s a much more pressing matter. The strike could very quickly turn the ongoing parts shortage into a full-on nightmare. This is largely because the strike has expanded to 38 different parts distribution centers across 20 different states. That means workers are striking at the heart of the automobile supply chain. 

There are also concerns that the impact of the strikes will likely ripple out into the supply chain via freight movement. There is a large ecosystem that keeps freight moving between various Big Three suppliers. Supply Chain Management Review adds that while finished autos will likely be fine for a while, those who move car parts from point A to point B will feel the impact much sooner. 

The supply chain publication adds that everyone isn’t hurting due to the strike. Struggling import numbers could receive a boost as leaders at Ford, GM, and Stellantis look elsewhere around the globe for finished auto parts. Regardless of whether it’s good or bad, though, most companies in the auto industry and its tangential networks are going to feel the impact in one way or another. 

Establishing Strong Supply Chain Leadership

It doesn’t matter if you’re talking about Hollywood actors or automobile workers. When strikes happen, they mess with your supply chain. When these events and others like them occur, you want to have strong, resourceful, and creative leadership in place to lead your company. 

The ongoing pressure on the supply chain in recent years has put particular emphasis on the role of the Chief Supply Chain Officer. CSCOs are quickly becoming a necessary part of a leadership team.  

The ongoing pressure on the supply chain in recent years has put particular emphasis on the role of the Chief Supply Chain Officer.

A good CSCO can maintain consistent oversight over a company’s supply chain. They can avoid overly stretched, lean chains (as was the issue before the pandemic) as well as perpetually disrupted and unpredictable supply issues (as has been the case since the pandemic started). 

Companies with a competent CSCO can immediately capitalize on opportunities and brace for impact in relation to the UAW strike. They can plan ahead with clear leadership and direction in place. 

For those looking to add a competent CSCO to their C-suite, it’s important to work with an executive search partner like Stanton Chase. Our consultants bring experience, expertise, and recruitment tools and networks to the table that streamline the recruitment process. We help make sure you end up with the right candidate for the unique needs of your industry, your company, and your team. 

It doesn’t matter if you’re in the transportation industry, the manufacturing industry, or any other industry. Chances are, you’re going to feel the pressure of supply chain concerns sooner or later. If you can’t wait for supply chain disruptions to play out in real-time, you want to have the leadership in place to help you successfully navigate each situation as it arises. That way, during times of disruption, you can minimize losses, maximize runway, and ensure that you’re in the best position to outstrip competitors, take advantage of opportunities, and thrive as a company when things improve again. 

About the Author

Peter Deragon is a Managing Director at Stanton Chase Los Angeles, the Supply Chain Global Functional Leader, and the Capital Markets and Investment Banking Global Subsector Leader. He is also active in the CFO Practice Group and Financial Services, where he started his career. He has 30-plus years of experience as a trusted advisor and manager in B2B environments. In his free time, Peter supports charitable organizations, especially those focused on ocean stewardship.