Import producer Peter Kopke, Sr. discusses the impact of the impending port strike on ‘The Bottom Line.’
The upcoming work stoppage of shipping workers at ports along the East and Gulf coasts could seriously affect auto sales across the country.
Extended port strikes will delay the arrival of new car inventory, raising costs for potential buyers. Not only will it be difficult and expensive to buy a car, but shortages of essential parts and materials will hamper the maintenance of existing vehicles.
The International Longshoremen’s Association negotiates on behalf of 45,000 longshoremen in a dozen US ports from Maine to Texas where together they manage nearly half of the ports. goods from other countries by sea. It has warned its members that they are prepared to strike if they do not have a new contract by the October 1 deadline.
‘If someone has a fix or remembers or something they know now, I can make an appointment and go there today if possible.’
BUYERS HAVE TO FACE RISING PRICES IF PORT WORKERS GO ON STRIKE, AN EXPERT SAYS.
Tom Maoli, owner of Celebrity Motor Car Co based in New Jersey, said that before the pandemic, he used to have three to six months worth of cars in the area. Today, a business only has about 30 to 45 days of inventory.
That means there will historically be enough to deal with this storm, he said. However, it is a different story today. If the ports close, “we will burn the inventory in one month,” said Maoli.
Cars for sale at AutoNation Honda in Fremont, California on June 24, 2024. (David Paul Morris/Bloomberg via Getty Images/Getty Images)
Brian Moody, editor-in-chief of Autotrader, told FOX Business that even if a car is manufactured in the US, some parts, whether it’s the transmission or wheels, may come from overseas.
POSSIBLE PORT STRIKES SEND RIPPLE EFFECTS THROUGH BUYING, THREATS CURRENCY RISE
Even though 95% of the car is manufactured in the US, dealers and customers still have to wait for those parts, he said.
Maoli said car dealers may rely on selling used cars due to the lack of new models.
Cars sold at the Volkswagen dealership in St. James, New York, on September 21, 2022. (Steve Pfost/Newsday RM via Getty Images/Getty Images)
With limited inventory, prices for both new and used cars will skyrocket. However, those who have stopped buying a car will face a problem, too.
The work stoppage will make it difficult for dealers to get the parts needed for repairs.
“The interesting thing about the car business is that if you don’t buy anymore, you have to fix it [your car]. You need tires, you need brakes… you have to keep your car running,” said Maoli. “And if you don’t have the brakes, there’s nothing you can do.”
If the strike continues for a long time, customers may be forced to wait between 30 and 90 days for a part replacement.
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Moody said “even reliable cars have parts that wear out.”
“That’s not a matter of reliability. That’s designed to wear out. The same with tires, the same with other parts of the car,” he added.
Chevrolet Silverado pickup trucks at a dealership in Colma, California, on Jan. 26, 2024. (Photographer: David Paul Morris/Bloomberg via Getty Images / Getty Images)
Maoli is ordering more parts to improve the inventory at his stores, but the problem is that many other retailers around the country are doing the same thing, “so the goods will run out very quickly.”
Moody suggests that owners bring their vehicle to a shop as soon as possible if anything needs to be replaced or repaired.
“If a person is corrected or sent back or if he knows something now, I will choose him and go there today, if possible,” he said.
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