Parts suppliers better prepared to withstand long strike, analyst says
The effects of the UAW strike at GM are beginning to be felt by parts suppliers.
But suppliers may not feel the pain as much as in years past.
Brian Long is director of Supply Chain management research at Grand Valley State University. He surveys supply companies in West Michigan every month. And he says most have diversified their businesses.
Long says he talked to one affected supplier that had been running overtime shifts for the 15% of its business that’s related to GM.
“He said that probably what they’re going to do is eliminate the overtime,” Long says. “And the rest of the work that they have to have done, the other 85%, will just continue on as usual.”
Some suppliers have already announced layoffs due to the strike.
But Long predicts there won’t be widespread problems unless the strike lasts for more than a month.
“The point that we would worry is when it gets up to about a month or something like that,” Long says, “because then it starts to cascade backward.”
Long says the effects cascade from larger suppliers down to smaller suppliers as the strike goes on, so the effects can build.