A recent survey conducted by the MEMA Original Equipment Suppliers unveils significant disruptions faced by the vehicle suppliers due to the ongoing UAW strike against the Detroit Three. The survey, dated September 29, 2023, highlights that:
• Approximately 30% of the vehicle suppliers have initiated layoffs as a direct result of the strike.
• By mid-October, over 60% of suppliers anticipate beginning layoffs.
• A concerning 70% are anxious about the financial sustainability of their sub-suppliers.
• Over half of the halted suppliers need a minimum of one week to restore production to its pre-strike state.
The vehicle suppliers sector, which represents a vast majority of employment in the automotive industry, employs 900,000 individuals. This number is in stark contrast to the 146,000 UAW Detroit Three autoworkers. Moreover, these suppliers play a pivotal role in the economy, contributing 2.5% to the U.S. GDP.
Additionally, MEMA has taken proactive steps to alleviate the situation. They are in discussions with the White House administration to chalk out a financial aid plan targeted at smaller suppliers – those generating revenues under $200 million. The products these suppliers provide, frequently ranked Tier 2 or below, are fundamental to the supply chain’s continuous operation.
However, the challenges don’t end with the strike. The vehicle supply chain faces another hurdle with delays in commercial vehicle crossings at the U.S./Mexico border. In a recent meeting co-chaired by MEMA with the White House National Economic Council (NEC) and National Security Council (NSC), the group put forth two suggestions:
•Extend the border crossing hours in the U.S. Customs and Border Protection (CBP) El Paso and Arizona zones, ensuring they can handle the influx of trucks at these sites.
Streamline truck crossings in the southwest U.S. by having the U.S. CBP liaise closely with the Texas Department of Public Safety (DPS). Despite these discussions, Texas still maintains inspections of trucks arriving from Mexico.
MEMA has committed to conducting weekly surveys to monitor the situation closely and promises to relay vital data from their findings.