Many smaller U.S. manufacturers that supply parts to the Detroit Three automakers will be at risk if a long United Auto Workers strike shuts down assembly lines starting next month, industry executives and analysts said. Many small and medium-sized auto parts manufacturers are in a weak financial condition after the shock of pandemic shutdowns and subsequent semiconductor shortages that depressed vehicle production at General Motors, Ford and Stellantis NV's North American operations for much of the past three years, industry experts told Reuters. A strike by the UAW is not a certainty.
DETROIT - Many smaller U.S. manufacturers that supply parts to the Detroit Three automakers will be at risk if a long United Auto Workers strike shuts down assembly lines starting next month, industry executives and analysts said.
With regional banks tightening credit, some smaller parts makers could run out of cash or struggle to re-start production once the Detroit Three and the UAW come to terms and assembly lines roll, industry experts said. "There's no question, there will be a strong ripple effect down through the supply chain," said Daniel Rustmann, a shareholder in Detroit's Butzel law firm who works with auto suppliers. "It could be the straw that breaks the camel’s back.""Our revenue is going to take a hit of 10 to 20%," said Todd Olson, chief executive of Twin City Die Castings Co in Minneapolis, which manufactures an array of metal components for automakers.
Laurie Harbour, president of Harbour Results, said she is concerned by the number of her firm's auto parts-making clients who are not yet preparing for UAW walkouts. UAW's Fain has said Sept. 14, the end of the current UAW master contracts with the Detroit Three, is a "deadline, not a reference point." UAW members are voting this week to authorize strikes if new agreements are not concluded, and UAW leaders organized what they called "practice pickets" at certain plants this week.
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