The Auto Worker Strike Can Hurt All of Us!

How does the United Autoworkers strike affect me? That is the most common question I’m getting from people on my consumer-advice talk radio show regarding the current strike.

Lots of carsPhoto byiStockPhoto

As a consumer advocate with nearly 50-years of experience, I have observed the effects of past strikes and supply-chain shortages and can almost predict what will happen in the auto industry.

Expect higher prices on all makes and models!

While this strike may not necessarily cause shortages, it will likely result in increased car prices across the board due to what I call "perceptionomics," where consumers perceive shortages and panic, leading them to expect and be willing to pay higher prices.

Car dealers are aware of this perception and often take advantage of the situation, increasing prices on all cars, even though this strike only affects specific models such as Chevrolet Colorado pickups, GMC Canyon pickups, Chevrolet Express vans, GMC Savana vans, Ford Broncos, and Ford Ranger pickups.

During such times, the rhetoric in the market claims that all vehicles are affected, creating pressure on the system as consumers look for alternative brands. While there may be some truth to this, I have found that our own panic and perception of shortages contribute to the problem.

This was evident during the Covid-19 pandemic when people stocked up on toilet paper, not because they were running out, but because they feared a shortage. This excess stocking up created the actual shortage, not the actual consumption.

The same can be said for recent supply chain interruptions on car parts. Suppliers immediately raised prices on the anticipation they would run out. Consumers paid higher prices because they expected to pay more: perceptionomics.

While supply and demand do influence pricing, our willingness to pay higher prices out of FOMO (Fear Of Missing Out) only exacerbates the negative impact on our lives. Therefore, my advice is simple: unless it is absolutely necessary, avoid making purchases during times of shortage, strife, strikes, or panic, as doing so only worsens the situation.