Ripple effect of UAW strike with Big Three impacting small auto parts suppliers

Entering day five of the United Auto Workers strike and some auto parts suppliers are warning of possible layoffs.

UAW President Shawn Fain announced Monday night that more plants will be called on to join the strike by noon Friday unless serious progress in negotiations with the Big Three are not made.

"We’re fighting. We’re holding the line," said Arnisha Daniel.

Daniel is one of the many autoworkers at Ford Michigan Assembly in Wayne pushing through Day 5 of the UAW’s strike with even more questions about the immediate future.  And major changes are already happening in the industry.

"We just want to stick together," she said. "We want to see things just move at a better and progressive way for everybody."

Meanwhile, the suppliers who provide the many small plastic and metal parts going into American-made cars hang in the balance.

Particularly, it is the smaller companies who might lay off workers in a major ripple effect.

"This is troubling indeed because of the speed," said Jan Griffiths.

That’s the reaction from Griffiths, an automotive analyst for mid-Michigan supplier CIE Newcor. It just announced plans to lay off nearly 300 workers due to the strike.

Jan spent 35 years running global purchasing and supply chain operations in the auto business.

"First of all CIE is being smart by putting that notice out there now to notify their workforce and others, that there’s a layoff coming," she said. "And when you’re in a situation like this as a Tier 2 supplier, you have to conserve cash.  

"You've got cash coming in for a few more weeks from the products you have already made, but if you are not producing right now because of the strike - then there is no cash coming."

She says many other small suppliers will follow suit with layoffs if a deal is not reached between the UAW and Detroit automakers soon.

"They’re fragile right now because they’ve just recovered from Covid barely, the chip crisis," she said. "They’ve had to deal with wage increases, transportation increases, utility increases, raw material increases, the cost of money.

"They’re having to manage all of this and now you have a strike that puts a dead stop on their income and cash, and that’s a problem."


UAW strike could extend to more plants on Friday

If the UAW strike drags on, there will be massive effects on the economy in Michigan and nationwide.

Ford was able to reach a tentative agreement with Unifor, the union that represents Canadian workers, earlier on Tuesday.