Auto suppliers, workers likely to see impacts in looming UAW strike

Auto suppliers, workers likely to see impacts in looming UAW strike

Workers at auto industry supply companies are preparing for potential impacts as the United Auto Workers and Detroit’s “Big Three” are still working to strike a deal.

The two sides have been working to come to an agreement since mid-July. The UAW is asking for the elimination of wage tiers, the return of retiree benefits like health care and pensions, a 32-hour work week, and a 46% wage increase. While all three automakers have returned counteroffers to the union’s demands, none have been accepted.

The contract the auto workers are currently under is set to expire on Thursday at 11:59 p.m. If the two sides don’t come to an agreement by then, the union is expected to go on strike.

UAW members tell Scripps News Detroit they’re preparing to live on less in case of a strike in which workers would go from their regular pay to $500 per week in strike pay.

Workers at local auto supplier companies say they’re also preparing to make cuts to their budgets.

“We manufacture parts for the Big Three. In doing so it’s metal parts. We deal with robots, robotics,” said Anthony Messina, who works for a supplier he preferred not to name.

Messina says he has worked in the industry for years, including employment at one of the Big Three automakers in the 1990s. He says he and his colleagues are concerned about what’s to come for them.

“If this strike does happen, which I believe it will, and they don’t have it resolved within 30 days, maybe even sooner, there’s going to be a lot of people laid off,” said Messina. “That, in turn, they say will put a dent in the economy, but I think it’s a little bit more than that. It could be a total loss for some companies that are trying to recover from this pandemic.”

Messina says while UAW members will receive strike pay, supplier workers are not protected by a union. If they lose their jobs or their employers go out of business, workers would be at the mercy of unemployment, which currently allots $362 per week. He and others have been trying to prepare rainy-day funds in case there is a work stoppage.

“Whether it be the vending machine or going to a fast food place during lunch, you may be cutting back because again if you’re going to get $362 (weekly) and I’m making between $3,500 and $4,000 a month, you’re giving me basically 26%-27% of what I was making now to live on,” said Messina.

Industry experts say a strike could mean complete closure for smaller suppliers.

“The United States of America has built 8 million fewer vehicles over the last three years than it would have otherwise. Car companies were still able to raise their prices and make money — same with car dealers — not true for suppliers,” said John McElroy with Autoline.

McElroy says because of the pandemic, when there was a chip shortage and slowed production, suppliers closing could cause monumental impacts down the line.

“The big, million-dollar, multinational suppliers, they’ll be able to manage this because they have other places in the world that they sell and build products that they’re not affected by the UAW strike. It’s the smaller companies, the tier 2 and tier 3, the suppliers to the suppliers,” said McElroy.” If some of these smaller suppliers go out of business, then what? If you’re just missing one part from a car or truck, you can’t make it.”

This story was originally published by Whitney Burney and Adam Tabor at Scripps News Detroit.