In a recent letter to the Biden administration, MEMA, the Vehicle Suppliers Association, emphasized the critical role and interdependence of vehicle suppliers in the country’s automotive manufacturing landscape.
MEMA also highlighted the impact the ongoing contract discussions between the UAW and the Detroit 3 automakers will have on the supplier community.
Given the nature of vehicle production throughout the supply chain, even a single component’s unavailability can halt an entire production line. The vehicle-supplier sector still bears scars from the ripple effects of the coronavirus pandemic, the semiconductor-chip crisis and ongoing labor deficits.
“MEMA has been activating and engaging with relevant officials, opening lines of communications on behalf of suppliers, including those at the White House,” commented Bill Long, president and CEO of MEMA. “In every discussion, we shared clear facts and insights into the fragility of the vehicle supplier community and the need for fast and easily accessible programs to assist suppliers in navigating the financial hardships caused by the strike. We continue to work closely with the administration to develop a clear path forward.”
Findings from a recent industry survey by MEMA’s Insights team reveal that more than 80% of suppliers have faced elevated levels of distress since 2021. Without a robust supplier base, the U.S. risks lagging in transformative technology and will find itself more reliant on imports. The recent UAW-Detroit 3 contract negotiations’ work stoppages have made the situation even more concerning.
“The recent work disruptions tied to the UAW-Detroit 3 contract talks have further exacerbated vulnerabilities, especially among already distressed suppliers,” said Ann Wilson, senior vice president, government affairs, MEMA. “And the U.S. is depending on many of these same suppliers to substantially transform their products and manufacturing facilities to address emissions and infrastructure requirements for tomorrow’s transportation landscape. We appreciate the engagement from the White House on this vital issue.”
Directly employing more than 900,000 individuals, vehicle suppliers have a monumental impact on the U.S. economy, contributing to 2.5% of the GDP and accounting for more than 4.8 million jobs. As the nerve center of new vehicle innovations, suppliers ensure that Americans have safe, reliable transportation. They’re also instrumental in steering the nation toward zero-emission vehicles.
MEMA is working directly with the Biden administration and urgently calls upon the administration to:
- Introduce a scalable program – To maintain the workforce and operational capacity, ensuring the supply chain springs back to full capacity post-strike. Primarily aimed at smaller suppliers with annual revenues under $200 million, ensuring their continued viability.
- Establish an immediate training program – Enabling suppliers to retain their workforce during the strike and equipping them with new skills needed for future transformative manufacturing.
- Reassess the Domestic Manufacturing Conversion Grant Program Under the Inflation Reduction Act (IRA) – The currently anticipated project sizes by the Department of Energy do not reflect the reality of most supplier investments, making it vital to review these benchmarks for the sustainable growth of the U.S. supply base.
The pivotal moment the supplier industry faces requires decisive action. MEMA stands firm in its commitment to advocate for the automotive supplier community and urges the administration to safeguard the future of U.S. auto manufacturing.