Pat Green is nervous. He has spent the past two years trying to hire talented people to fill two plants in Grand Rapids operated by Cascade Die Casting Group, which makes aluminum and zinc diecastings for the automotive and appliance industries.
“We have a good team now and I don’t want to lose people because it was hard to find good people,” company CEO Green told the Detroit Free Press on Monday.
That’s why, on the fourth day of the historic United Auto Workers strike against the Detroit Three automakers, Green was intensely planning how to end the strike without laying off workers if it escalated and dragged on for weeks. He has good reason to plan. On Monday night, UAW President Shawn Fenn announced a new strike deadline of this Friday at noon. If Ford Motor Company, General Motors or Stellantis had not made sufficient progress toward an agreement with the UAW by that time, Fain would expand the stand-up strike to more plants.
For Green’s part, if that happens, he would start by eliminating overtime at the company and then he would ask for volunteers to take some time off with a reduced pay plan. It’s something he started considering last weekend.
The UAW strike began at 11:59 p.m. Thursday when approximately 13,000 UAW workers at three Detroit automakers walked out of three plants as part of the first wave of shutdowns until a new labor agreement is reached. Those plants are the Ford Michigan Assembly Plant in Wayne (final assembly and paint only), the Stellantis Toledo Assembly Complex in Ohio, and GM’s Wentzville Assembly in Missouri.
At some point, the UAW has said it plans to strike more plants at all three companies if the union and the automakers can’t reach a tentative agreement. A widespread and prolonged strike would mean that parts suppliers would not be able to continue production if the vehicle assembly plants that use their parts were idled. No one is sure how long suppliers can hold out.
“We’re in a better position than others, but if other people in the supply chain go down, we’re going to have another crisis like the chip crisis,” Green said, referring to the recent shortage of semiconductor chips. Industry. “If it’s extended to five or six weeks, there’s going to be real problems in the supply chain. And I could be wrong; it could last even less than that.”
first result
The strike has already had some impact. CIE Nucor, a component manufacturing company in Michigan, has warned that it may have to lay off 293 people.
German-based supplier ZF said it has already had to lay off some employees at various sites, including in Michigan, ZF North America, Inc. said Tony Sapienza, head of communications. ZF supplies components for all vehicles made at the three plants targeted so far in the strike, including the Jeep Wrangler 4xe hybrid transmission built at the Toledo facility.
Sapienza declined to say which ZF facilities were affected or how many people ZF had laid off. ZF, which has its North American office in Northville, employs 11,000 people at five manufacturing sites and four technology centers in Michigan.
“The impact was immediate; we had to slow down production in some areas,” Sapienza told the Free Press. “If the strike had extended or lasted more than a week or two, it would have been a crisis for the supply chain. I am really concerned about Tier 2 and Tier 3 and their ability to remain solvent.”
Sapienza said a larger and longer strike would “damage” his company, but because of its size, it would be OK.
But “each plant that goes offline creates additional stress in the supply chain, and we really hope that our customers and UAW are taking that into account,” Sapienza said.
U.S. Steel said Monday it is temporarily disabling Furnace B at its Granite City Steel Plant in Illinois as “risk mitigation” in response to the UAW strike. The company said it was evaluating how many of its 1,450 employees would be affected.
Keep an eye on Unifor too
All this news comes as Canada’s UAW counterpart, Unifor, is negotiating a new contract with Detroit automakers. Its existing contract was scheduled to expire at 11:59 pm on Monday. Unlike the UAW, Unifor is following tradition and has selected a target company – Ford – to negotiate the deal first. It will use that agreement as a template for contracts with the other two. In the US, the UAW is negotiating with all three automakers separately, but together.
At about 4 p.m. Monday, Unifor national president Lana Payne said there was still no tentative agreement with Ford.
“While we remain at the table, the possibility of a strike increases with each passing hour,” Payne said, adding that the union has advised its more than 5,600 members at Ford facilities in Canada to be prepared for all scenarios, including a strike. .
If Unifor does not get a tentative agreement and strikes in solidarity with the UAW, it would be a double whammy for parts suppliers.
Sapienza said, “These are not normal times. We are coming off of three years of stress on the supply chain and so we are already in a delicate situation. We are certainly keeping an eye on Unifor. … The system “There’s only so much stress it can take.”
Layoffs could run into thousands
The situation of the supply chain is critical. That’s because it had to recover from the COVID-19 pandemic, which shut down the industry for eight weeks, then left suppliers facing a severe shortage of semiconductor chips used in various car parts. Many suppliers have struggled to hire and retain workers since early last year.
Joe Petrillo, director of business development and advanced engineering at Meridian Lightweight Technologies in Plymouth, said the company is a global supplier of lightweight cast metal parts to several automakers, including the Detroit Three. The strike is therefore a concern because the supply chain ranges from Tier 1 suppliers – who supply parts directly to carmakers – down to smaller Tier 2 and Tier 3 suppliers, who supply components to Tier 1 groups.
“We are monitoring the incidents and checking with our suppliers and customers,” Petrillo said. “In our view, an escalation of events that leads to a prolonged strike that potentially disables all Detroit Three (manufacturing) plants may prove to be the last Jenga block on the supply base that is stressed to the maximum, That will have to be overcome by COVID shutdowns, ‘stop production’ due to chip and parts shortages, while still trying to work our way through a disrupted manufacturing labor market.”
Glenn Stevens, executive director of MICHauto, a statewide automotive industry advocacy group, said he’s been talking to suppliers for a few months and they’ve all been preparing for a strike situation for some time.
“Some people are much more active than others, but no one was turning a blind eye anticipating that the work might not stop,” Stevens said.
There are approximately 1,000 supplier facilities in Michigan, he said, adding that 96 of the top 100 suppliers to the North American auto market are either headquartered or have a facility in Michigan. So if the strike spreads to other automaker plants and lasts for weeks, job cuts could reach thousands.
“You have direct employment and you have the multiplier effect of each automotive job and between six to 10 people for each automaker job, so that’s substantial,” Stevens said. “It is the largest industry in our economy. It contributes more than $300 billion annually to the state of Michigan.
potential impact
Harbor Results, Inc. Large suppliers are more protected from the consequences of a strike than smaller suppliers, said Laurie Harbor, CEO of . This is because they often have other customers from other industries to keep the business going. They can move people around and change schedules to avoid mass layoffs.
“I spoke to several companies last Friday and most said there has been little or no impact so far,” Harbor said. “Any one program that you’re seeing with (automakers) is not going to lead to massive layoffs, but that will come tomorrow or the next day if (the UAW’s fan) closes more plants and we have a critical product shortage.” “If (Ford) gets the F-150 pickup, you’re going to see more layoffs.”
Because the sales volume of the F-150 is so significant, if the union strikes the plants that build Ford’s big seller, “you’ll see thousands of layoffs because you have so many supplier plants and sub-suppliers,” Harbor said. Said .
“The fact that it’s happening this way is really better for the supplier community,” Harbor said. “But every day or week you may see more and more layoffs.”
Response from major auto suppliers
At giant Tier 1 auto supplier Magna International, leaders are monitoring the situation closely, said Magna spokesman Dave Niemiec. The company has approximately 12,450 employees in Michigan. Niemiec said it was too early to comment on any specific impacts the strike would have on operations.
“However, we have focused heavily on contingency planning to proactively address any temporary business disruption to our operations,” Niemiec said. “If that time comes, we are prepared to temporarily reduce production on the affected programs as efficiently as possible, while being equally prepared to ramp up rapidly when ready. In the meantime, we hope that The parties will be able to reach amicable agreements and the disruption and potential impacts will be minimal.”
Asked about any impact from the attack on Lear, spokesman Brian Corbett said, “At this time, we are not commenting on the UAW attack.”
‘We have to take action’
Harbor said the suppliers it spoke with are prepared, or at least planning, if the strike escalates, including effectively considering ways to continue production, altering their shift scheduling and laying off layoffs. including offering supplementary wages to 70% of workers. ‘Salary if they are fired.
“They’re people who are economically strong and don’t want to lose their people,” Harbor said. “It’s a daily challenge and you’ll evaluate everything every day: What’s my prognosis? What can I deliver to my customer? And run a little inventory so when the spigot comes back, I have parts and I’m ready to go.”
At Cascade Die Casting Group, Green said the company makes parts for the Detroit Three’s SUVs and pickups. For example, it makes parts for the Jeep Grand Cherokee that Stellantis builds at its Mack Avenue Assembly Plant in Detroit. If the UAW strikes that plant or any of the Detroit Three’s heavy-duty pickup plants, Greene needs to be ready.
“We know we can build up some inventory for a while, but it’s a week or less so we have to start planning to ask our employees to take leave almost immediately,” Green said. “We are waiting until one of the plants we supply parts to closes down and we hope the union will close additional plants when the heat increases. When that happens, That’s when we have to take action.”
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Jamie L. Contact Lareau: [email protected]. Follow him on Twitter ,jlareauan, Read more about General Motors and sign up for our auto newsletter. Become a customer.
Source: www.freep.com
