GRAND RAPIDS, Mich. (WOOD) — A prolonged United Auto Workers strike against Detroit’s Big 3 automakers could eventually force suppliers in West Michigan to close, an auto analyst told News 8 Sunday afternoon.
The historic UAW strike is now entering its sixth week and expanding. More than 34,000 union members have joined the cause at six plants and 38 distribution parts facilities, campaigning for better wages and benefits.
“Our cause is just, the money is there and our strategy is working,” UAW President Shawn Fain told union members Friday. “Time is on our side.”
Fain said proposed wage increases began at 9% and have risen to 23%, which would be a record increase. But Fain says workers deserve more.
“These are already record contracts, but they come at the end of decades of record decline,” Fain said. “So it’s not enough to be the best ever when auto workers have gone backwards over the last two decades. That’s a very low bar.”
Mike Wall, an auto analyst for S&P Global Mobility, said West Michigan is a “foundation” for the auto industry and the region is especially impacted by disruptions.
“When it comes to West Michigan, folks may not realize it’s your neighbors,” Wall said. “You’d be hard-pressed to find somebody who isn’t touched by automotive, even though we don’t build a single vehicle in West Michigan.”
“Automotive is still a key linchpin for this region, that’s why it’s so critical for us here,” he continued.
West Michigan businesses build a laundry list worth of auto supplies: brackets, exhaust clamps, dimming mirrors, door handles and more.
“It’s not just those supplier plants as well, it’s the mom-and-pop cafes, diners, restaurants, shopping,” Wall said.
The suppliers are already dealing with inflation and high labor costs. Wall said some could shut down if the UAW strike lasts through the end of the year.
“You will lose suppliers,” Wall said. “We will have a much tougher time within this industry. It’s something that can’t be sustained that long.”
“I’m mindful of the fact this doesn’t happen overnight,” Wall continued. “Suppliers are a hardy bunch, they find a way to survive. But there’s only so much you can do if you start seeing some of these high-volume programs going down.”
Wall described a long-term strike as potentially having a “chilling event” for suppliers in West Michigan. Suppliers that survive could still have big layoffs, Wall said.
“It could force some hard decisions for suppliers,” Wall said. “The last thing you want to do is layoff people, especially in West Michigan. You think about the suppliers here, they’re family.”
The auto industry has improved since the pandemic and supply chain shortages, Wall said. More vehicles are on the market than a year ago and prices have gradually improved.
“At the end of the day we’re still in a better place now than we were during the peak of the semiconductor challenges because production has come back in so many places,” Wall said.
Even though the UAW strike has impacted production for Detroit’s Big 3 automakers, Japanese and Korean automakers have ramped up production, Wall said. But Wall fears a prolonged strike will result in fewer and fewer cars being made, which could raise new and used vehicle prices once again.
“Inventory has gone up, but will that be able to sustain if we have these ongoing shortages of vehicles due to the strike?” Wall said.