UAW Strikes Lead to Increased Layoffs in American Auto Supplier Firms

Key Points

• 🚗 The ongoing UAW strike against the Detroit Big Three is significantly impacting auto suppliers in the United States.
• 📉 A survey from MEMA Original Equipment Suppliers reveals that nearly 40% of auto suppliers have already laid off workers due to the strike.
• 🇺🇸 Auto suppliers employ over 900,000 workers, contribute 2.5% of the US GDP, and operate in all 50 states, making their well-being critical to the national economy.
• 🔽 Layoffs have increased by nearly 10% week-over-week, with 39% of surveyed suppliers having already laid off direct labor employees.
• 📅 Half of the suppliers who haven’t laid off workers yet intend to start layoffs by the week of October 30.
• 🏭 Over 30% of suppliers expect it will take one to three weeks to restart idled production, and almost 80% are concerned about the financial stability of their sub-suppliers.
• 💼 MEMA is urging the federal government to provide financial assistance to suppliers during the strike and has recommended specific measures, including a scalable loan/grant program and an emergency training program.
• 🤝 The UAW strike, which began on September 15, has disrupted operations at Ford, GM, and Stellantis plants across the US and has escalated tensions between the union and automakers.

The ongoing UAW strike against the Detroit Big Three is having a devastating impact on auto suppliers. As per a recent survey from MEMA Original Equipment Suppliers, nearly 40% of auto suppliers have already laid off workers.

Collected from October 9 – 11, 2023, the survey revealed the impact of the UAW’s ongoing strike on the US’ vehicle supply chain. It should be noted that vehicle suppliers employ over 900,000 workers, making them six times larger than the 146,000 members of the UAW Detroit Big Three. Auto suppliers also contribute 2.5% of the US gross domestic product (GDP), and operate in all 50 states. 

The MEMA survey revealed that layoffs have increased by almost 10% week-over-week, with 39% of surveyed vehicle suppliers having laid off a portion of their direct labor employees. Among the suppliers who have not yet started laying off workers, half indicated that they intend to start layoffs in the week of October 30, MEMA noted in a press release. 

This is not all, however, as over 30% of the MEMA survey’s respondents indicated that they would require over one week and up to three weeks to ramp up their idled production. Almost 80% of suppliers are also concerned about the financial viability of their sub-suppliers, and 30% have expressed concern about their internal financial viability. 

MEMA is calling on the federal government to provide financial assistance to suppliers amidst the UAW’s strike against the Detroit Big Three. The trade group is recommending a scalable, low-cost loan/grant program, an emergency training program, and a reduction of the domestic manufacturing conversion grant program (IRA) from $50 million to $10 million.

The UAW strike began on September 15 and has idled workers at Ford, GM, and Stellantis plants across the United States. So far, the UAW has escalated its efforts against the automakers, and executives, such as Ford CEO Jim Farley and Ford Blue President Kumar Galhotra, have expressed exasperation at the ongoing strike. Galhotra, for his part, noted that Ford has reached its limit, and giving in to the union’s demands any further would compromise the automaker as a whole.