Teamsters Union Shows Its Clout In Auto Strike Deal
STEERING their rumbling rigs back onto highways yesterday, thousands of Teamsters ended a strike of the nation's biggest vehicle hauler and eased their stranglehold on the economically vital sale of new autos.
The return to work came after Teamsters Union representatives approved a settlement offering better pay and benefits and restricting employment of non-union drivers. Since Sept. 7 some 5,000 union members had halted shipments of new vehicles by Ryder Automotive Carrier Group Inc., a subsidiary of Miami-based Ryder System Inc. and the No. 1 hauler of new vehicles to US dealerships.
The strike shook much of the auto industry, which accounts for nearly 4 percent of the nation's gross domestic product and the jobs - either directly or indirectly - of 8.7 million US workers.
Although both sides in the dispute expressed satisfaction with their agreement, the Teamsters appeared to have met their chief aims by staging a focused strike that primarily targeted the largest vehicle hauler and, in turn, its biggest customer, General Motors Corp. By aiming at lead industry players dependent on unionized labor, the Teamsters were able to ensure that companies did not turn to replacement workers.
Most important, the Teamsters gained on the long-standing issue of job security. The deal also provided for a pay increase of $1.35 over four years.
Although GM suffered most, the strike buffeted the entire industry. The Big Three US auto-makers reported disappointing September sales of cars and light trucks. Indeed, the walkout thwarted the sale of some 300,000 vehicles last month, says Paul Ballew, chief economist at J.D. Powers and Associates in Troy, Mich. Other analysts said the figure probably was lower.
After a few more weeks the strike would have forced some auto plants to shut down as vehicles jammed railheads, ports, and factory yards, said Mr. Ballew. The Teamsters said 500,000 cars and trucks were backed up awaiting shipment. Although Ryder disputes the figures, it is known to ship some 25,000 new vehicles each day. The strike cost the company $1 million per day.
''There is a real problem out there; the timing of the strike was really bad,'' Mr. Ballew says. The walkout by drivers, mechanics, and dock workers hit as dealers were rolling out 1996 models and coping with a soft market following strong sales last year, said industry analysts. Many dealers hired replacement carriers or sent employees long distances to drive the vehicles to the showroom one by one.
General Motors Corp. depends most on Ryder and was badly pinched by the strike. Although many models remained available, cars and trucks in short supply before the walkout were especially hard to obtain.
In particular, Chevrolet dealers found light trucks beyond their reach, especially the Suburban and Blazer, say industry analysts. A crimp on supply tends to drive customers to less troubled dealerships because it badly delays delivery of vehicles with options that customers count on. During a trucking strike, delivery to dealers of some models can take months, says Steve Morrison, director of market analysis at AutoPacific Group, an industry consultancy in Southfield, Mich.
''Buying cars is a very emotional, impulse decision, and if a dealer doesn't have the color, style, or option a customers wants, that customer will quickly go elsewhere,'' says Mr. Morrison. Overall, sales of GM trucks last month fell 5.5 percent.
Cadillacs also proved elusive. Steve Foley, a Cadillac dealer in Northbook, Ill., says that at least twice a week, he had to send several employees 300 miles to Detroit to pick up new cars.
Automakers should recoup some losses this month as customers who waited out the strike return to showrooms. Falling auto-loan rates should also spur sales, says Ballew.