- Longshoremen went on strike Tuesday, shutting down ports on the East and Gulf coasts.
- A prolonged strike would mostly affect automakers that import vehicles from Europe.
- Car companies have plenty of inventory, enough to cover 77 days of sales.
Dock workers across the US East and Gulf coasts went on strike Tuesday morning.
The effects of a prolonged work stoppage are likely to be felt throughout the US economy, including the auto industry, which depends on ports in cities such as New York, Baltimore and Savannah, Georgia, to handle millions of vehicles coming from outside.
Fortunately for American consumers, there is an excess of inventory at dealers across the country, so the immediate impacts of the strike are likely to be limited.
The latest September data provided by Cox Automotive shows that more than 2.84 million new cars are on sale. Unless new inventory arrives, car companies have an average 77-day supply of vehicles to sell. That’s well above last year’s levels and higher than the 65-day level industry experts agree is the healthiest.
European carmakers such as BMW, Mercedes-Benz, Volkswagen and Volvo are expected to be the most affected, Reuters reported, citing a study by Barclays analysts.
But most of these automakers have significantly more than the national average of 77 days of inventory.
Car awaiting export overseas at port in Bremerhaven, Germany. Martin Meissner/AP
According to Cox, BMW has 88 days, Mercedes has 100 days and Volvo has 142 days supply.
As for VW, the Volkswagen brand has a healthy 66-day supply, while its luxury division Audi has an 86-day supply.
The Port of Baltimore led the nation last year, handling more than 847,000 cars and light trucks. BMW, Mercedes-Benz, Volvo and Volkswagen all operate vehicle processing and distribution facilities at the port.
While the West Coast ports, which are not affected by the strike, handle most of the traffic coming from Asia, automakers such as Toyota and Hyundai also use East Coast ports.
Toyota, which brings vehicles for its South Shore sales to Jacksonville, Florida, has the benefit of a hearty inventory to draw on. Both flagship brand Toyota and its luxury division Lexus have less than half the national average, with 35 and 30 days of inventory respectively.
A Toyota spokesperson told Business Insider in a statement that the company was “closely monitoring the situation and developing countermeasures to minimize any impact” to its customers and dealers.
Kia Telluride SUV in Port of Brunswick, Georgia awaiting export. Stephen B. Morton/Georgia Port Authority
Other major ports include Savannah and Brunswick in Georgia, which combined processed 830,000 vehicles last year from brands such as Mercedes-Benz, Hyundai and Kia. At the same time, the Port of Jacksonville handled just over half a million vehicles from Toyota and Volkswagen in 2023.
More than 45,000 dockworkers represented by the International Longshoremen’s Association walked off the job Tuesday after failing to reach a new labor agreement with the US Maritime Alliance, a consortium of maritime employers.
The ILA’s demands include a 77% wage increase over the life of the six-year agreement and limits on automation at the ports, the Associated Press reported.
USMX has countered by offering to raise wages by nearly 50% and maintain the current automation policy.