Boyd Group Comments on UAW Strike
Sept. 27, 2019—The Boyd Group Income Fund commented on the potential impact of a prolonged GM labor strike.
“To date, the Strike has had no meaningful impact on our ability to source GM collision parts required to complete collision repairs on GM vehicles, however, should the Strike continue for a prolonged period of time, it is possible that GM collision parts supply could be disrupted in a way that could have a material impact on our short term results”, commented Brock Bulbuck, CEO of the Fund.
In the event of a prolonged Strike, based on investigations to date, the Boyd Group believes that a number of actions could be taken to mitigate the GM supply chain disruption so that most repairs to GM vehicles could continue. These actions would include greater use of aftermarket and used parts, however, the overall effectiveness of these possible actions is still unproven. Additionally, some low volume replacement parts for GM vehicles are only available from GM and repairs requiring these parts could be halted until these parts become available from GM.
“Based upon what we have learned as well as arrangements and plans that could be implemented in the event that the Strike does extend into weeks and months, we believe that we are well positioned to minimize its impact”, added Bulbuck, ”However, these plans and actions are untested and therefore there continues to be risk that a prolonged Strike could materially impact our results during the Strike period.”