MEMA Survey: Suppliers Feeling Impact of Industry Disruptions

MEMA Original Equipment Suppliers recently surveyed its members on the impact of the UAW strike against the Detroit Three.

Key takeaways from the September 29, 2023, survey, according to MEMA, include:

Nearly 30% of surveyed vehicle suppliers have laid off some direct labor employees as a result of the strike.
Additional suppliers will initiate layoffs with more than 60% expecting to begin layoffs by mid-October.
70% of vehicle suppliers have concerns about their sub-suppliers’ ongoing financial viability.
More than 50% of idled suppliers indicated they need at least one week to return production to pre-strike levels.

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).

MEMA said it is working with the White House Administration to develop a plan to provide financial assistance for smaller suppliers, defined as less than $200 million in revenue. The output of these suppliers, often Tier 2 or lower, is critical to the ongoing viability of the entire supply chain.

Another complication impacting the vehicle supply chain is the slowdown of commercial vehicle crossings at the U.S./Mexico border, MEMA added. Last week, MEMA co-led a meeting with the White House National Economic Council (NEC) and National Security Council (NSC) officials to address these border crossing delays.

The group had two recommendations for the NEC and NSC:

Expand the border crossing hours in the U.S. Customs and Border Protection (CBP) El Paso and Arizona regions to accommodate the additional trucks using these locations.
Ensure the U.S. CBP coordinates with the Texas Department of Public Safety (DPS) to expedite truck crossings throughout the southwest U.S.

To date, Texas continues to inspect trucks coming across the Mexican border. MEMA Original Equipment Suppliers said it will survey members each week and share critical information from the results.

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