A view of the exterior of the JP Morgan Chase & Co. corporate headquarters in New York City May 20, 2015.
REUTERS/Mike Segar/File Photo Acquire Licensing RightsSept 7 (Reuters) - J.P.Morgan on Thursday said supply chain disruptions from a potential United Auto Workers (UAW) union strike would cut new vehicle production, drive up used car prices and put pressure on margins in the personal auto insurance business.
The automakers "represent about 40% of light vehicle auto sales (by units) in the U.S., and IHS Markit estimates that a strike would disrupt North American vehicle production by roughly 75%," J.P.Morgan said.
The brokerage identifies Allstate Corp (ALL.N) and Progressive Corp (PGR.N) as the insurers with the most exposure to a potential UAW strike, with Allstate more susceptible due to its weaker capital position.
Used-car prices have had the most impact on auto margins in recent years compared to other factors such as higher spare part costs, labor costs, increased litigation, and severe accidents, the brokerage added.
Persons:
Morgan Chase, Mike Segar, J.P.Morgan, Jimmy Bhullar, Reshma Rockie, Tasim Zahid
Organizations:
Co, New York City, REUTERS, United Auto Workers, UAW, Detroit Three, Ford, Chrysler, General Motors, Allstate Corp, Progressive Corp, Allstate, Anderson Economic Group, Thomson
Locations:
New York, U.S, Michigan, Reshma Rockie George, Bengaluru