Podcast: executive sessions – UAW Strike – MiddleGround Capital
January 29, 2024

Podcast: executive sessions – UAW Strike

Podcast Links:


On MiddleGround’s eighth episode of Executive Sessions, Clayton Gullett leads discussions with MiddleGround Founding Partner, John Stewart, and Head of our Transaction Team, Justin Steil. This episode covers:


  1. The United Auto Workers Strike
  2. 2017-2024: A New Normal
  3. Electric Vehicles


The United Auto Workers Strike

The United Auto Workers (UAW) Strike, while now concluded, marked a monumental turning point in the history of labor strikes and the auto manufacturing world. What set this strike apart was the modern and strategic approach; the UAW sought impact without severely crippling the industry or negatively impacting workers, which was achieved by conducting hyper-targeted strikes at profit-driving plants. The uncertainty surrounding where the UAW were going to strike next, and for how long, limited the amount of preparation firms could do. This strike was also effective because the post-COVID automotive industry doesn’t have 90, 120, or even 180 days of inventory that used to be kept on hand. The UAW was able to ratchet up maximum pressure, manufacturers had no choice but to listen to their demands.

Taking all these factors into account, it was essential for firms with automotive exposure to proceed carefully. At MiddleGround, we proactively assessed our plant exposure to the Detroit Three in a “strike tracker”. We identified some exposure to impacted vehicles, like the Ford Bronco and Jeep Wrangler, but were thankfully insulated from any major impacts. Staying plugged into the strikes allowed us to navigate and make better-informed decisions.


2017-2024: A New Normal

The share of automobile production taking place in the United States has steadily declined since the 1970s as manufacturers have relocated plants outside the country, with Canada and increasingly Mexico filling the gap. Historically, 2015-2018 production levels were considered “normal” (at more than 17 million cars a year), but it’s time to accept that production levels have permanently changed and there’s a “new normal” (at 16-17 million cars a year). This has been caused by unprecedented challenges, like a global pandemic and severe supply chain disruptions, but also shifting consumer tastes.  While larger cars, EVs, and SUVs are still popular and profitable, demand for entry-level, low-cost sedans has dramatically declined. The mix of vehicles produced has changed as Americans, who at one time purchased those affordable, entry-level sedans, are now turning to alternative modes of transportation like ride-sharing and public transit.


Electric Vehicles

Electric vehicles represent one of the largest advances in the history of the automotive industry. Over the last five years, the popularity has soared; however, this surge has brought on a lot of misinformation. The transition to electric vehicles (EVs) is a slow but ongoing process, and while some estimate that usage will climb to 30% by 2030, several issues must be resolved before that’s possible.

Critical issues like Infrastructure, Investment, and Incentives continue to evolve. Unlike gasoline pumps, public accessibility of EV charging stations is limited and varies significantly by geography. The industry is also becoming more and more segmented, posing challenges as automakers compete without any consistency between technology. For example, varying battery or charging technology makes it difficult to create charging stations that would be universal across EVs. While the potential of Electric vehicles is incredible, significant strides need to be taken in improving infrastructure and accessibility.