Supply Chain

GM Strike Ripples Out to Suppliers on Day 4

Experts say hundreds of thousands of U.S. workers could be laid off as the impact of the strike spreads.
Matthew HellerSeptember 19, 2019

The strike against General Motors entered its fourth day on Thursday amid signs that the dispute is affecting suppliers.

The company and the United Auto Workers union met again to negotiate a new contract, with the strike by nearly 50,000 hourly workers having spread across 31 factories and 21 other facilities in nine states primarily in the Midwest.

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The dispute is starting to be felt by some of GM’s 10,000 suppliers, with Nexteer Automotive saying it will have to temporarily reduce its workforce in the coming days. The company makes electric and hydraulic power steering systems, steering columns, and driveline systems.

“We will continue to monitor the situation and update our employees as we learn more,” Dennis Hoeg, a Nexteer vice president, told the Detroit News. “Our goal is to return to full production as quickly as possible.”

Continental AG and Denso International America were both continuing to monitor the situation. “We remain hopeful that both sides will find a quick and agreeable resolution,” a Denso spokesman said.

Suppliers generally deliver goods to GM on a just-in-time basis, shortly before they are put onto vehicles along the assembly lines. “Experts says the strike could eventually lead to a ripple effect with hundreds of thousands of U.S. workers being laid off as the impact of the strike spreads,” CNN reported.

Negotiators for the union and GM are working through differences on wages, health care and seniority for temporary employees, among other issues.

“The fact that they are still talking is good news,” said Marick Masters, a business professor at Wayne State University, told the Detroit News, while adding that the union “will fight tooth and nail” to keep health care benefits.

According to a source cited by the Detroit Free Press, GM has proposed that workers pay 15% of their health care costs, up from the current estimated level of 3%. GM and Ford each spend $1 billion a year on worker health care, which some industry observers consider unsustainable.