GM strike makes no impact on auto prices

[Oct 3, 2007.]

If you saw the recent General Motors-United Auto Workers strike, and were hopeful that you might see benefits passed on to the end user in terms of discounts. You would be let down. In actuality the two day strike will likely have no impact on car prices or sales.

When it comes down to it, the strike will ultimately benefit GM. The two days the workers were off the assembly line gave General Motors a chance to to sell off some of its inventory backlog, and not have to continue paying the expense of assembly lines to pump out more vehicles.

Yes, an ongoing strike could have very likely crippled GM, caused its inventory to slowly decrease, and shoppers that are used to dabbling in the domestic market would look elsewhere for a new auto.

But, the reality of this years slow sales...It is going to be very hard for the industry to trump 16 million in sales, something that has been done for the past eight years. Yes the deal with the UAW to shift the responsiblityo of GM for an estimated $50 billion in health care costs is good for the automaker, as well as Ford and Chrysler, ift hey follow suit and strike similar deals. Domestic manufacturers are still far from being out of danger.

The fact of the matter is that, trucks, and sport utility vehicles are dominating the offerings of the Detroit auto manufacturers. This is a liability whne more and more consumers are now turning to sedans. In August, nearly 65 percent of GM, Ford and Chrysler sales were trucks compared with 38 percent of truck sales from import manufacturers.

These high percentages for trucks were ok when all the big SUVS were the big sellers. But in August, there wasn't a single SUV in the top 10 best selling vehicles for the month. Ford's F150, Chevrolet's Silverado, Dodge's Ram and GMC's Sierra barely made it onto the list, but they had sales numbers far below the same time last year.

What does this mean for the consumer? If you are in the market for an SUV, shopping now would be a smart move. GM is offering $4,000 rebates on the Trail Blazer, while Chrysler is offering $4,500 rebates on the Dodge Durango. Ford is offering rebates of as much as $3,500 on the Lincoln Navigator. And if you are in the market for car with styling tailored to your grandfather, the Mercury Grand Marquis is available with as much as a $7,000 rebate.

So while the strike didn't have much effect for the consumer, the drop in the SUV craze is making it easier on the pocket book to pick up a new sport utility vehicle.

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