Suppliers carry on with production, wait and watch UAW-GM talks

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DETROIT — As 46,000 hourly General Motors workers prepare to strike at midnight, automotive suppliers are carrying on with production — for now.

GM can carry on for a week or two without running out of parts, Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research.

Suppliers have not yet been instructed by GM to slow or stop supply production, said Steven Wybo, senior managing director of turnaround advisory firm Conway MacKenzie.

“Release schedules from GM to suppliers haven’t changed yet,” Wybo said. “Beyond a week, I see releases going down substantially, which is when we’ll start to see some suppliers suffer.”

Magna International Inc. confirmed it’s maintaining production levels.

“Like the entire supply base, we are in wait-and-see mode,” the supplier said in a statement Sunday. “We would like to see both sides get back to the negotiating table, working towards an agreement. Until then, we are continuing to monitor the situation and we remain hopeful for a quick resolution. Although Magna supplies GM on a number of programs globally, it would be premature to comment on the potential impact to our operations right now.”

Continental Automotive Systems Inc., the North American subsidiary of Continental AG, is also operating as usual for now.

“Currently, we are watching the situation and will adjust our production schedules in accordance with the customer releases depending on the duration of the strike,” Kathryn Blackwell, vice president of communications and marketing, said in an email.

Seating supplier Lear Corp. declined to comment.

After a week or so, seat and powertrain suppliers would likely begin to shut down dozens of lines and plants across the Midwest, Dziczek said. A prolonged strike would then proliferated through the supply base. Suppliers employ more than 140,000 people in Michigan alone, with a great many supporting products for GM.

“This is our last resort,” Terry Dittes, vice president of the UAW-GM department, told reporters following a meeting of the unit’s national council. “It represents great sacrifice and great courage on the part of our members and all of us.”

A union spokesman told Automotive News it was a unanimous vote to strike. Negotiations are set to resume at 10 a.m. Monday. 

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