Auto suppliers struggle to recover as UAW contracts near ratification

UAW picketers have returned to work as they vote on tentative agreements with the Big Three, however, automotive suppliers are still struggling to recover.

The strike lasted more than six weeks and cost the industry at least $10.4 billion, according to an assessment by the Anderson Economic Group. That includes several lay-offs and about $3.3 billion in lost wages and earnings to supplier companies and workers.

"About 40% of our members ended up having some layoffs," said Julie Fream, the president and CEO of MEMA Original Equipment Suppliers. "They're continuing to say we’re worried, we’re pessimistic, we want to make sure that we’re protected as we go forward."

MEMA represents about 550 suppliers in the nation.

As union members are back on the line, supplier workers who were temporarily laid off are back as well. However, it will take some time for operations to completely revert to their usual state.

"They’ve got to order parts, get those parts in, get the plants restarted, get their people back – and that’s one of the biggest challenges," Fream said.


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Local union groups are voting on whether to ratify the agreements secured between the UAW and the Big three. The UAW president has called the deal historic.

John Walsh, the president of Michigan Manufacturer’s Association, backed Fream's statements, saying, "it’s not the flip of a switch. It takes time to wind down, it takes time to wind back up."

Walsh added that financing could also be disrupted.

"The banks are gonna be asking, ‘how quickly can they get back up to speed?’" He said. "Do they expect their orders to go to where they were? Will they be bigger? Will they be smaller?"

Fream said support from the Federal Reserve System would benefit suppliers during this time.

"Making some moneys available –whether it’s for short term loans or even grants– to allow some financial flexibility," she said.