Butzel Legal Corner - Ahead of the Curve - November 2023

Butzel’s Global Automotive Team

Butzel provides virtually every type of legal service required by automotive suppliers. We have counseled the leaders that transformed Michigan from the home of the Motor City into the epicenter of the global automotive industry it is today. Our work involves important matters across the world. The members of our Global Automotive Team are experienced—from connected cars and autonomous vehicles, product liability and recall and warranty matters, to supply chain management issues. We are profoundly involved in restructuring the industry, including its most significant acquisitions and divestitures, workouts and bankruptcies, technological developments and general commercial transactions.

What Lies Ahead? Post-Ford Workout

It’s all over the news, there’s no escaping it—the United Auto Workers (UAW) strike looms on in spite of Wednesday’s breaking news that after 41 days of picketing the UAW and Ford Motor Company (Ford) have announced they have reached a tentative agreement on a new contract. Despite Ford workers reportedly returning to work while the ratification process ensues, striking and work stoppages continue at designated General Motors (GM) and Stellantis facilities. Our attorneys have been sought out and featured as legal experts across a variety of news outlets in recent weeks, commenting on and analyzing the up-to-the-minute state of the strike and its effect on the industry. 

Notwithstanding the tentative agreement with Ford, latest accounts cite additional UAW workers have joined the strike, reportedly 6,800 at the Stellantis plant in Sterling Heights, Michigan and another 5,000 at the General Motors Arlington Assembly Plant in Texas. While overall, the estimated 34,000 workers already striking against the Detroit Three are reported to be showing signs of strike fatigue after more than a month on the picket line.  

Whether GM and Stellantis follow suit and workers return to the strike-affected facilities this week or months from now, based on decades of experience in the automotive industry, Butzel attorneys can provide sound counsel and representation for our supplier clients to sustain them as the strike continues–whether they have been distressed by the strike or are holding their own during these challenging times. Experts have surmised that an extended strike could have a higher impact on smaller suppliers, noting the trickle-down effect already inherent in the supply chain. Added to the mix is that after three years, many suppliers are just recovering from the challenges presented by the COVID-19 pandemic.

We wish we had a crystal ball to see a clear end date and the outcome of the strike for all. What we do know is that we are here for our clients, in the trenches alongside them to provide effective solutions to come out on the other side in a manner that provides for financial stability and continued growth for their businesses. We offer expertise in a trio of significant areas that may present challenges for suppliers at this time:

Finance: Methods to preserve cash and reduce expenses; counsel and representation in mergers and acquisitions, bankruptcy

Contracts: Compliance; entering new and exiting existing deals and agreements; supply chain issues

Labor & Employment: Dealing with layoffs; maintaining steady shifts; possible WARN Act implications; preparing for the end of the strike and reengaging your workforce

We can help in these areas and more. Clients have historically depended on us as a large firm with the resources to provide legal counsel and representation in myriad areas of the law, all while providing a level of exceptional client service typically found in a small boutique firm. We know Automotive Law and the intricacies inherent to the businesses of our supplier clients. We’re here for you no matter what lies ahead—for the duration of the strike and when it concludes.