Warner Norcross + Judd LLP Partner Laura N. You discussed possible impacts of a UAW strike in this week’s Automotive News article “How a potential UAW strike would have significant ramifications on auto logistics.”
The current UAW contract will expire on Sept 14. If a new contract hasn’t been reached, Automotive News suggests there could be massive ramifications for logistics and transportation companies that move vehicles and parts throughout the supply chain. The logistics industry remains in a somewhat fragile state, as evidenced by the recent bankruptcy of trucking company Yellow Corp., a once-dominant player that laid off 30,000 workers when it halted operations.
"There are entities whose business depends entirely on the movement of automotive parts, and that movement could grind to a halt," said You, a member of Warner’s Automotive and Supply Chain Industry Groups. "When the strike is over, maybe there simply won't be enough people to move product from point A to point B."
You encouraged parts makers to proactively open lines of communication among their customers, suppliers and logistics companies. In particular, she said it would be important for suppliers to ask to customers what their ordering plans would be in the event of a strike and to communicate what lead times might be to return to full-volume production after it ends.
"This is not the flip-the-switch sort of industry where suppliers can go from zero to 100 overnight, but that might be the expectation of your customer when the strike ends," she said. "It's important [suppliers] set the expectation now for what a production ramp-up looks like in the event that their ordering is completely stopped for the duration of the strike."
Automotive News subscribers can read the complete story here.
With deep roots in the heart of the U.S. automotive industry, Warner’s Automotive Industry Group provides proactive, timely and cutting-edge advice to suppliers throughout Michigan, North America and around the globe. Warner attorneys are recognized leaders in every area of law that impacts the global automotive and mobility market and understand the complex relationships between parts suppliers and vehicle manufacturers. Firm attorneys stand ready to assist suppliers assessing their current contracts and terms to implement this new change to Michigan law.
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