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Global MFG - Sep 20, 2019

As GM Strike Stretches On, Supply Chain Starts to Suffer

Ben Foldy | The Wall Street Journal

As GM Strike Stretches On, Supply Chain Starts to Suffer

Automotive suppliers idle plants and lay off workers; ‘it goes right to the bottom line’

Companies that supply parts to General Motors Co. are being forced to idle plants and lay off workers, as the national strike called by the United Auto Workers completes its fourth day.

Nearly 46,000 full-time GM workers walked off the job on Monday after the UAW and GM were unable to agree on a new four-year labor agreement before the previous one expired. As of Thursday afternoon, talks were continuing between the company and the union, but the stoppage was likely to enter a fifth day. The strike is now the longest nationwide strike against GM since the 1970s.

By stopping all production at GM’s U.S. plants, the strike is also beginning to affect the web of manufacturers that produce parts that go into the company’s cars. With no vehicles being made, those companies can do little but wait until the strike ends, industry experts say. Economists estimate that every automotive assembly job impacts between five and eight other jobs.

“When you don’t know whether it’s going to last one day or six months, it’s kind of hard to make decisions,” said Sheldon Klein, who works with suppliers as the co-chair of the automotive practice at Butzel Long, a Detroit-area law firm. “It goes right to the bottom line for most suppliers.”

The companies most affected so far are those that operate on a “just-in-time” basis, delivering difficult-to-ship parts like seats and door panels to GM’s assembly plants from factories located nearby, said Michael Robinet, executive director of automotive advisory services at IHS Markit....

#automotive #manufacturing

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