The United Auto Workers (UAW) strike continues to have an impact beyond the union’s targeted facilities, including suppliers. Now, a recent survey indicates that suppliers are starting to lay off workers as a result of the ongoing strike. The UAW initially called for walkouts against all three of the Big Detroit automakers (GM, Ford, and Stellantis) following the expiration of previous labor contracts on September 14th.
According to a recent survey from MEMA, an organization that represents more than 1,000 U.S. OEM and aftermarket supplier members, nearly 30 percent of surveyed vehicle suppliers have laid off some direct employees as a result of the UAW strike.
The survey, conducted September 29th, also indicates that additional suppliers are expected to begin layoffs by mid-October, with more than 60 percent of MEMA members indicating new layoffs are just over the horizon. What’s more, 70 percent of vehicle suppliers have concerns about their sub-supplier’s ongoing financial viability, and more than 50 percent of idled suppliers indicate they will need at least one week to return production to levels seen prior to the strike.
MEMA indicates that it is now working with the Biden administration to hash out a plan to provide financial support to smaller suppliers generating less than $200 million in revenue, often Tier 2 and lower. In a release, MEMA states that the vehicle supply chain has also been impacted by a slowdown of commercial vehicle crossings at the U.S. / Mexico border.
The UAW has expanded its strike against the Big Detroit Three automakers twice since the initial walkouts in September. It’s estimated that 25,300 UAW members are currently striking across the Big Three. The UAW membership includes 146,000 workers for all three automakers, while MEMA states that vehicle suppliers employ over 900,000 workers.
GM recently submitted its sixth contract proposal to the UAW since negotiations began this past July. GM has also secured a $6 billion line of credit, possibly indicating anticipation of a long, drawn-out negotiation process.