As we approach September 14, 2023, the expiration date for the United Auto Workers (UAW) Union’s contracts with General Motors, Ford, and Stellantis, growing concerns are emerging among the automotive supply base about the possible impacts of a UAW strike if no agreement is reached between the parties. Considering this impending situation, automotive suppliers within the GM, Ford, and/or Stellantis supply chains should be contemplating the necessary steps to take in both the present and future to safeguard their businesses from potential strikes.
According to Foley and Lardner LLP, this situation reinforces the need for companies to prepare and develop action plans for labor disputes. An effective plan can include vital components such as evaluating contractual obligations with customers and understanding the implications of a potential strike on those obligations.
Moreover, companies should assess whether they have the ability to source parts from alternative suppliers and grasp the prospective cost and legal implications of third-party sourcing. They should also aim to comprehend the potential labor law pitfalls that these scenarios could entail, and above all, ensure the continuity of supply during a strike. Without these measures, they face the risk of significant business disruption.
While no company can entirely prevent the impacts of a strike, a well-thought-out contingency plan can help mitigate its effects and keep the business running. In a time of potential labor unrest, preparedness becomes crucial for these automotive suppliers to ensure their survival and continued operation in the face of such challenges.