General Motors (GM) finds itself in a precarious position as the threat of a prolonged strike by the United Auto Workers (UAW) union looms. While rivals Ford Motor and Stellantis gear up to launch revamped combustion-engine models, GM's immediate focus is squarely on electric vehicles (EVs). The company has ambitious plans to introduce at least five new EVs, including all-electric versions of its popular Chevrolet Silverado and GMC Sierra pickups, according to insights from GlobalData.
However, GM has encountered a series of hurdles throughout the year, struggling to iron out disruptions in battery manufacturing and manage its EV supply chain and logistics. Notably, issues with the delivery of its Cadillac Lyriq and GMC Hummer EVs have cast a shadow. In the second quarter, GM delivered a mere 1,348 Lyriq and 47 Hummers, significantly below expectations. These delays were partly attributed to problems in battery module assembly, with GM's CEO Mary Barra acknowledging issues with automation equipment suppliers causing bottlenecks that led to manual assembly of battery modules.
Sam Fiorani, Vice President of Global Vehicle Forecasting at AutoForecast Solutions, suggests that a longer strike could paradoxically offer GM an opportunity to address and potentially resolve these ongoing EV and battery operation issues. “A production stoppage could allow GM to solve bottlenecks,” Fiorani stated, emphasizing the potential for GM to ramp up production more efficiently once factories are back in operation.
However, not all analysts share this perspective. GM's own CEO, Mary Barra, has expressed concerns, stating that a strike “would not be positive” for the company, urging a swift resolution with workers. Bill Rinna, Director of Americas Vehicle Forecasts at GlobalData, argues that any potential benefits from resolving technical issues must be weighed against the financial losses GM might incur during a prolonged strike.
Daniel Ives, an auto analyst at Wedbush, describes the strike as “a potential nightmare situation” for GM, as it coincides with a critical period for GM to address EV-related challenges and compete in the growing EV market. Moreover, the UAW strike in the United States could disrupt the flow of vital auto parts to GM's operations in Canada and Mexico, impacting EV production in those regions.
GM's Ramos Arizpe plant in Mexico is already producing the Chevrolet Blazer EV and expanding production of the Chevrolet Equinox EV, while the Ingersoll plant in Canada plans to manufacture the BrightDrop Zevo 400 electric delivery van, according to data from GlobalData.