In the early days of the United Autoworkers Union strike, West Michigan’s auto parts suppliers will most likely focus on cost containment.
“Maybe not spending on marketing. Pulling in some of your marketing dollars. Pulling in spending on raw materials and things like that because you’re going to be prioritizing. Cash is going to be king in this whole process.”
Mike Wall is Executive Director of Automotive Analysis at S&P Global.
“And I do suspect as I’m talking to suppliers, one of the last areas they want to touch, if you will, is the labor side. You don’t want to be laying off workers for a multitude of reasons. They’re your family. They’re kind of part of that corporate family, first and foremost, but on the other hand too, eventually production will start up again and you want to be able to bring them back into the fold. And in a tight labor market that’s very, very difficult. So, you know, early days maybe you see more of a focus on training, on maintenance in these plants, and trying to preserve that headcount for as long as you can. Unless and until this thing stretches out farther where you may have to look at some targeted layoffs.”
Wall explains it all depends on UAW leadership’s strike strategy which has yet to fully reveal itself.