For the first time in the history of the American automobile industry, this workers’ strike simultaneously targets the three major American manufacturers. Auto manufacturing depends on long-term contracts, and in the event of a prolonged strike, suppliers would only be able to rely on the contracts they already have with foreign automakers or non-union manufacturers, including Toyota, Honda and Tesla .
The UAW chafed at the suggestion that its walkouts would harm the United States or its workers. “It’s not going to destroy the economy, it’s going to destroy the billionaire economy,” said UAW President Shawn Fain. Hello America earlier this week. The union justified its demand for 36 percent raises for workers over the life of the contract by pointing out in part that executive salaries have risen even more in recent years. “The billionaire class is running away with everything. The working class must live paycheck to paycheck and subsist on the leftovers,” Fain said.
Fortunately, there is a big difference between a pandemic and a strike: the SARS-CoV-2 virus did not warn anyone of its arrival. The UAW and the automakers have been negotiating for weeks and have loudly stated that they are far apart on these issues. This provided some notice.
Wall, the analyst, says that before the walkout his company advised auto suppliers to talk with their lenders about extending their credit lines and start thinking about areas where they might make cuts in businesses that already have tight margins, whether it’s new equipment or donuts. and coffee. “It’s a bit like rearranging deck chairs, but it’s important to do everything you can to protect your cash flow,” he says.
Although the pandemic has stressed many businesses, many are now more aware of the dangers of an unagile automotive ecosystem. The concept of “just in time” — creating and sending the precise number of widgets needed to build something exactly when it’s needed — has fallen slightly out of favor, says Gordon of the University of Michigan. “What everyone in the supply chain learned from Covid is: ‘Let’s build a supply chain that is two-thirds just in timeand a third just in case“, he says. But it hasn’t always been easy, as shortages of components and raw materials persist. “It’s not for lack of trying,” Gordon says.
For small suppliers, there is hope on the horizon, even if the strike extends beyond what their coffers and planning can handle. Reuters reports that the Biden administration is in preliminary talks to bail out those who cannot withstand the strike, especially if it lasts more than six to eight weeks.
Additional reporting by Will Knight.
