Employment and labor pricing is a difficult subject. There are two important phenomena to consider.
The first is that wages and working conditions are "sticky"; that is, wages and conditions become entrenched in culture and industry best practices, buttressed against market conditions both upward and down. This is obviously a mixed blessing for both parties. If you have ever had to switch jobs in order to get a market level raise, you have experienced this first-hand.
The second is that switching jobs is expensive. It takes time, effort, and it's risky. Most people will endure shocking amounts of abuse to avoid having to search for a new job.
Consequently, wages and work conditions are not good predictors of labor market health in the short term; you can have a "normal" labor market and still see workers choose collective action, because sometimes it's the only way to make a firm wake up and pay attention to the rest of the world.
However, chances are the labor market isn't "normal". There are many possible reasons why wages and working conditions might regress, not just a simple oversupply. Here is another theory:
Small businesses in the US are not doing well. Recent studies have shown that US firms are now closing at a higher rate than they form; that almost all job gains since the GFC have been added at the largest firms; that wages at the largest firms have stagnated the most; and that the labor share of revenue is in sharp decline. These are all signs that the US labor market is increasingly subjected to monopsony conditions. Labor monopsonies do not reduce total employment - they can, in fact, increase total employment - but compensation and conditions inevitably degrade, since workers have few alternatives.
Another possibility is collusion. Note that this action is aimed at new car dealerships, specifically. When problems are isolated to a specific kind of operation within a larger industry, and bounded in a specific region, it strongly suggests collusion among the owners. If business owners agree beforehand to wage ranges and conditions, no amount of over- or under-supply can affect those conditions.
Collective action cannot help in situations of labor oversupply, but conversely, they are the only way to address labor market monopsonies and collusion. That suggests the workers may believe their problems are being caused by monopsony and collusion, rather than oversupply or a handful of idiot bosses.