Auto suppliers asking for federal assistance to weather UAW strike
WAYNE, Mich. (CBS DETROIT) – Auto suppliers are bearing the brunt of the ongoing strike. Analysts estimate they've lost more than $2.5 billion in the first month of the strike.
So far, Ford has laid off more than 2,500 workers because of the striking workers at its plants in Wayne, Chicago, and Kentucky.
An industry expert says there's a multiplier effect, meaning for every worker on the picket line or laid off, there are seven to 10 other jobs impacted in the community, including suppliers.
Going into this strike, auto suppliers were in a fragile state and recovering from supply chain issues from the pandemic and chip shortages.
A month into the UAW strike, suppliers are facing significant disruptions.
"Things move very efficiently. So if there's a work stoppage in an OEM assembly plant, and we have 36,000 people out at assembly plants now, it's going to directly impact the suppliers very quickly," said Glenn Stevens, executive director of MICHauto and Detroit Regional Chamber's vice president of automotive and mobility initiatives.
According to MEMA, the Vehicle Suppliers Association, layoffs have increased by nearly 10% week-over-week, with 39% of its members having already laid off some employees.
"The first couple of weeks of the strike, they were able to sort of manage by increasing inventory and doing maintenance around their manufacturing facilities. But now they can no longer do that. And if they do no longer have customers of which they can sell their components or their parts, they no longer will need to have those workers in place," said Ann Wilson, Senior Vice President of Government Affairs for MEMA.
The trade association is set to have conversations with the White House on Friday to convince them to establish a loan or grant program to help suppliers weather this strike.
"At this time, the reality is we need them to act now. Because we cannot afford as an industry to lose 50 to 70% of our employment, overall, the ability for us to ramp back up as an industry will be grossly diminished, and we won't be able to then get back on board once the strike is settled," Wilson said.
Suppliers are also worried about this:
"That labor can go look for other jobs, and probably will because there are other companies hiring and other industries hiring. So we're one of our big concerns is starting back up in the labor in the system, being able to handle being able to make parts and get them back just in time and to the assembly plants again," Stevens said.
MEMA also points out that half of the suppliers who haven't started layoffs plan to do so on the last week of this month.
For more coverage on the UAW strike, visit here.