Trucks & SUVs

Is the GM Strike Impacting Silverado Sales?

It’s official. The Ram just took the title of the second-best-selling vehicle in the U.S. from Chevy Silverado for the first nine months of 2019. Amidst the ongoing GM strike, it’s fair to wonder if the Silverado’s production has been impacted. Here’s what we know so far.

The UAW strike at fault?

On September 16, 2019, approximately 49,000 GM union workers, including those who build light and heavy-duty pickup trucks, started picketing. U.S production of pickup trucks ground to a halt at factories in Flint, Michigan and Fort Wayne, Indiana.

Recently, a plant in Silao, Mexico had to close. The facility couldn’t get the parts it needed for production as a result of the strike. The closure effectively shut down all GM pickup truck production.

While proposals are being offered by both sides, the strike continues.

With GM truck production halted, it’s very likely that Ram will hold onto the second-best-selling title for the rest of 2019 according to auto sales analysts as reported by Yahoo Finance.

According to recently released sales figures, Ram gained a lead of 52,000 vehicles over the Silverado at the end of September. So far in 2019, more than 460,000 Rams have sold for an increase of 23% over the sales figures from 2018. By contrast, GM has sold more than 409,000 units which is a drop of 3.6% from 2018.

In the top spot, Ford’s F-Series pickup remains the most popular American vehicle with over 662,000 units sold in the first 9 months. This is actually a dip of 2.4% from sales in 2018.

The top three best-selling vehicles

America loves its pickup trucks and those produced by the three traditional Detroit automakers are among the top sellers. While switching places the top three does happen, normally Ford holds the top spot followed by Silverado and Ram respectively.

Zo Rahim, manager of economics and industry insights for Cox Automotive, explained that with the way things are currently going, there’s little chance Silverado will be able to make up the difference and reclaim the second slot at the moment.

But it can also be said that Ram enjoys strong retail sales and is favored by commercial fleet buyers according to Rahim. 

GM has reported that its pickup sales are down because of inadequate inventory as a result of converting factories to produce new versions of light-duty and heavy-duty models. The company explained that sales to individual buyers are very healthy. Sales to fleet and rental companies notwithstanding, the company explains that both the GMC Sierra and the Silverado outsell Fiat Chrysler and Ford full-size pickup trucks.

The future at GM

Even with the strike continuing on, GM’s sales are only down about 1% for 2019.

With dealerships well stocked before the strike launched, analysts say the strike didn’t hurt the company’s third-quarter sales. Once those inventories are gone, however, GM sales might take a serious hit if the strike continues.

In the latest strike developments, GM upped its latest contract offer to UAW workers according to CNBC. The offer boosts GM’s investment commitment to U.S. factories to $7.7 billion with the hopes it will end the nearly month-long strike.

The original $7 billion proposal from GM preceded the strike. GM told the union in their latest offer that all $7.7 billion would be all “direct” investments as opposed to the previous mix of direct and “indirect” investments it previously offered. Indirect investments included ventures such as other companies that produce parts used in production.

With the new offer extended, the company hopes it will be beneficial to both sides and that it will be considered “fair and worthy” by the union. It’s hoping the union will accept it and bring an end to the strike so production can return to normal.

If the company can get this deal done, it will have escaped the strike without it impacting Silverado sales too much.