A national survey showed 39% of responding vehicle suppliers have laid off some employees, and more will be forced to if the strike continues through October.
The most recent survey from a parts suppliers trade association revealed the impact on the vehicle supply base from the ongoing strike between the UAW and Detroit’s Big Three manufacturers.
MEMA Original Equipment Suppliers said in a news release vehicle suppliers employ more than 900,000 workers---more than six times the 146,000 workers represented by the UAW at Ford, GM and Stellantis. Additionally, suppliers contribute 2.5% of the U.S. GDP and operate in all 50 states.
The survey, collected from 54 respondents between Oct. 9-11, revealed:
- Layoffs have increased by nearly 10% week-over-week with 39% of surveyed vehicle suppliers now having laid off a portion of their direct labor employees.
- Of the suppliers who have not begun layoffs, half indicated they will begin laying off direct employees the week of Oct. 30.
- More than 30% of suppliers surveyed indicated they will need more than one week and up to over three weeks to ramp-up idled production; the greatest challenges to restarting operations are returning labor and material availability.
- Nearly 80% of suppliers are concerned about the financial viability of their sub-suppliers, while 30% of these suppliers express some concern regarding their internal financial viability.
MEMA continues to assert the importance of federal action to support the essential U.S. supplier base and to work with the White House to develop a plan to provide financial assistance for smaller suppliers. The output of these suppliers, often Tier 2 or lower, is critical to the ongoing viability of the entire supply chain.
MEMA recommended the federal government immediately initiate:
- A scalable low-cost loan/grant program to ensure suppliers have enough capital on hand to sustain their business during this crisis.
- Establish an emergency training program enabling suppliers to retain their workforce during the strike and equipping them with new skills needed for future transformative manufacturing.
- Reduce the minimum project amount of the domestic manufacturing conversion grant program (IRA) from $50 million to $10 million to be more inclusive of the entire vehicle supply chain.
MEMA Original Equipment Suppliers will continue to survey vehicle suppliers each week and share critical information from the results.
Abby Andrews