MEMA Survey: Increasing Concern Over Tier 2 Supplier Financial Viability 

MEMA Survey: Concern Rises Over Tier 2 Supplier Viability 

Vehicle suppliers continue to feel impacts from the UAW strike on Detroit’s Big Three automakers.

The most recent survey from MEMA Original Equipment Suppliers shows the vehicle supply base continues to feel impacts from the ongoing strike between the UAW and Detroit’s Big Three manufacturers.

The survey, collected from October 16 – 18, 2023, revealed:

  • Concerns over sub-tier financial viability remain heightened, with 79% of all suppliers surveyed indicating they are concerned.
  • The percentage of smaller suppliers that are concerned with their internal financial viability increased dramatically to 42%.
  • Supplier estimates of the ramp-up time to get facilities back to pre-strike levels has increased to 1.5 weeks; the greatest challenges to restarting operations remain retaining labor and material availability.
  • Of the 84% of suppliers that have received cancelled orders from their customers, 95% indicate they have received short to essentially no notice.
  • The percentage of suppliers that have laid off their direct and indirect labor employees remains essentially unchanged week over week, with 80% of suppliers who have yet to begin layoffs indicated they will begin in early November if the strike is not resolved.  

Vehicle suppliers employ over 900,000 workers, over six times more than the 146,000 UAW Detroit Three autoworkers, according to MEMA. Additionally, suppliers contribute 2.5% of the U.S. Gross Domestic Product (GDP) and operate in all 50 states. MEMA Original Equipment Suppliers said it will continue to survey vehicle suppliers each week and share critical information from the results.

The survey was conducted October 16-18, 2023, via email to 546 MEMA Original Equipment Suppliers members. There were 52 respondents.

For additional information and comments, contact: Megan Gardner, [email protected], 919-636-2941.

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