Strikes by Mack Trucks workers are about to come to an end, with strikers (numbering more than 3500 in three US states) having reached an agreement with management. The question now is what kind of market that they will be faced with when they return to work.
The heavy truck industry in North America has experienced a drop-off this year, owing mostly to a remarkably successful and profitable 2018. The Morning Call reports that when the Mack strike began 12 October, the company—a subsidiary of Volvo Group—was preparing to adjust to depressed market conditions. One facility, an assembly factory that employs 2400 workers, was going to suspend operations for two weeks; meanwhile, Daimler Trucks North America announced it was laying off nearly 1000 workers.
These circumstances had the effect of blunting the impact of the strike, which was organized by United Auto Workers (UAW), even if it did cause temporary disruption to Volvo’s production capacity. As The Morning Call notes, “the strike this week temporarily idled Volvo Trucks’ massive assembly plant in Virginia, which employs 3,000 people, because the facility is not receiving engines and transmissions from Mack’s Hagerstown, Maryland, powertrain plant.”
The strike would have hurt Volvo much more, and given the UAW more bargaining power, had it taken place six months ago, said Steve Tam, vice president of Americas Commercial Transportation Research Co:
“With respect to the timing of the strike, it’s considerably less painful now given the state of the industry and manufacturers needing to reduce production. Even without the strike, the industry was looking at reduced production rates in the fourth quarter.”
As things stand, Volvo projects 340,000 heavy duty truck retail sales in North America for 2019; in 2020, the company expects that number to fall to 240,000.