Vehicle Suppliers Grow Increasingly Concerned Over Tier 2 Supplier Financial Viability

SOUTHFIELD, MICH. – The most recent survey from MEMA Original Equipment Suppliers shows the vehicle supply base continues to feel impacts from the ongoing strike between the UAW and Detroit’s Big Three manufacturers.

The survey, collected from October 16 – 18, 2023, revealed:

• Concerns over sub-tier financial viability remain heightened, with 79% of all suppliers surveyed indicating they are concerned.
• The percentage of smaller suppliers that are concerned with their internal financial viability increased dramatically to 42%.
• Supplier estimates of the ramp-up time to get facilities back to pre-strike levels has increased to 1.5 weeks; the greatest challenges to restarting operations remain retaining labor and material availability.
• Of the 84% of suppliers that have received cancelled orders from their customers, 95% indicate they have received short to essentially no notice.
• The percentage of suppliers that have laid off their direct and indirect labor employees remains essentially unchanged week over week, with 80% of suppliers who have yet to begin layoffs indicated they will begin in early November if the strike is not resolved. 

Vehicle suppliers employ over 900,000 workers, over six times more than the 146,000 UAW Detroit Three autoworkers. Additionally, suppliers contribute 2.5% of the U.S. Gross Domestic Product (GDP) and operate in all 50 states. MEMA Original Equipment Suppliers will continue to survey vehicle suppliers each week and share critical information from the results.

This survey was conducted October 16-18, 2023, via email to 546 MEMA Original Equipment Suppliers members. There were 52 respondents.

For additional information and comments, please contact: Megan Gardner, mgardner@mema.org, 919-636-2941.

About MEMA Original Equipment Suppliers
MEMA Original Equipment Suppliers exclusively serves automotive original equipment (OE) suppliers, a part of the largest manufacturing sector in the United States and leading the way in new vehicle innovations. Members conceive, design, and manufacture the OE systems and technologies that make up two-thirds of the value of every vehicle, fueling international commerce and meeting society’s transportation needs. MEMA members are committed to safety and sustainability.

MEMA, The Vehicle Suppliers Association, is the leading trade association in North America for vehicle suppliers, parts manufacturers, and remanufacturers. It has been the voice of the vehicle supplier industry since 1904. Its more than 1,000 members are Strong by Association.

MEMA has offices in Southfield, Mich.; Research Triangle Park, N.C.; and Washington, D.C. Learn more at mema.org/original-equipment-suppliers.

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