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They Want More Money!

The risk to the bottom line poised by recent OEM strikes should be carefully considered and any good risk management plan should include not only getting out in front of any problems in the supply chain but also the potential disruptions that could occur in human resource management.

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As the automotive world watches the GM strike and the disruption it caused, I thought it might be timely to delve into how this effects our automotive aftermarket world. Though systemic strike-related problems for our non-GM dealer body may be a bit harder to quantify, any analysis of the consequence on the employees at the dealership level should consider the following areas:

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“I want more money” — UAW negotiators pointed to record profits as part of the reasoning behind striking and demanded better bonuses and pay for all workers including temporary workers. This is not lost on dealership employees, especially those not part of organized labor. Do you have a management plan in place as it relates to promotion/demotion and cost of living pay raises? ? Is the plan being utilized? 

“I demand more money” — Our team of risk managers has seen an uptick in employment-related insurance claims (demands) as employees launch action against our insured dealers for failure to promote and even retaliation lawsuits when employees are terminated for cause but believe it is because they sought a promotion. Does the employment practices liability policy you have in place cover some of these newer causes of action? Have you had an independent review of the policy?

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“My pay is affected” — Fixed operations personnel who have pay tied to the ability to turn revenue from the garage or sales and sales management personnel may experience a slowing of sales (thus income to them) as parts and new car inventory become scarcer due to the strike. 

Insurance claims data shows us the single largest risk facing any business is the risk posed by employees. Human capital accounts for a whopping 68% of all business insurance losses. With the other 32% being fires and natural disasters. After all, it’s employees driving the car that gets totaled, it’s employees who forget to tighten lug nuts or oil pan drain plugs and it’s the employees who have to heal broken bones. 

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The risk to the bottom line poised by recent strikes should be carefully considered and any good risk management plan should include not only getting out in front of any problems in the supply chain but also the potential disruptions that could occur in human resource management.

Click here to view more solutions from Nate Tallarino and Anthony Grace RMS.

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