DETROIT — As the United Auto Workers strike at two Johnson Controls Inc. plants veered down an unprecedented path, many suppliers felt like all-too-vulnerable deer caught in the headlights.
At the wheel was Ford Motor Co., which some suppliers saw as rolling over a fellow parts maker to back the UAW. Those actions have forced several large plastics parts suppliers to question their relationship with the No. 2 car company.
``On one level, it puts everyone on guard about Ford's commitment to its supplier base,'' said a high-level executive at one company. ``But on a deeper level, Ford also has sacrificed the mutual trust that passes between supplier and [original equipment manufacturer]. That could take years to heal.''
Several Tier 1 company executives voiced strong sentiments, all off the record due to the issue's sensitivity.
But it was clear that the just-settled strike, and its possible long-term effects, have shaken up the industry to a degree unlike most simple labor disputes.
``This was a dicier deal than your average strike,'' said David Cole, director of the Office for the Study of Automotive Transportation at the University of Michigan in Ann Arbor. ``All the parties played a high-risk game loaded with uncertainties. For Ford, it could drive a wedge in its supply base.''
The prickly situation stems from Ford's involvement in the dispute between Milwaukee-based JCI, a seat supplier to Ford, and the UAW. The strike began Jan. 28 at JCI's Plymouth, Mich., and Oberlin, Ohio, plants over wages, benefits and future union negotiating rights.
The Plymouth plant makes seat assemblies for Ford's hot-selling Expedition sports utility vehicle, which is rumored to net the carmaker about $1 million per day in income. Ford, which had asked JCI to allow the union into its plants, quickly quashed JCI's offer to let its nonunion management and temporary workers continue making Expedition seats during the strike.
Then, in a move labor experts say is unprecedented, the automaker handed the Expedition seat contract on a temporary basis to Southfield, Mich.-based Lear Corp.
Lear, a fierce competitor with JCI, began assembling Expedition rear seats Feb. 13 at its UAW-organized Detroit plant, while Ford's Chesterfield Township, Mich., plant started assembling the vehicle's front seats. The seats were shipped to Ford's reopened Wayne, Mich., plant for final production.
``Ford was in trouble and asked us to help them handle it. We're always happy to help out a customer of ours,'' said Lear spokeswoman Leslie Touma.
Ford also considered transferring seat production for its Econoline and Club Car minivans to Lear, Touma said. Those seats were made at JCI's closed Oberlin plant.
Some suppliers say Ford made the only call it could.
``I drive an Expedition and I know how popular they are,'' said one supplier. ``There could also be more to the story. We don't know how well Johnson Controls was performing for Ford.''
For its part, JCI supported Ford's decision. The supplier shifted metal fabricating and welding equipment to its Cadis, Ky., plant to supply frame assemblies for the Expeditions. The seats are made of polyurethane foam and include small, injection molded thermoplastic trim components that come from a variety of vendors, said JCI spokesman Jeff Steiner.
Steiner denied industry rumors that JCI intended to pull its $100 million seating contracts from Ford and close the two struck plants if not resolution was reached.
That drastic measure was not needed. The strike ended Feb. 20 when the UAW and JCI reached tentative agreement on a three-year contract. Production was expected to resume quickly at both plants.
Post-strike, no supplier points fingers at the UAW. According to Cole, union membership among automotive suppliers has dropped from more than 50 percent in the late 1970s to less than 20 percent today.
``The union has every right to organize and go on strike,'' said another large supplier. ``Our argument is more with Ford for stepping in the middle of this because they want labor peace. Suddenly, we're being asked to pay for it.''
Many suppliers believe the labor strike could fray a tenuous cord with the automaker. Ford and other Big Three carmakers have asked for major price concessions from suppliers, including a 5 percent cost reduction every year a vehicle is produced. At the same time, suppliers are asked to invest millions of dollars upfront in parts design and engineering, even though production can be four years away.
Industry experts estimate that labor costs can account for one-third of the expense of producing the Expedition seats, a labor-intensive process.
The strike agreement calls for wages at both plants to go up from about $9 an hour to those comparable at other nonunion JCI plants, which sources say can run $12-$14 an hour. While the wage differential alone was not the issue, it is another way that Ford is making suppliers squirm, said Donna Parolini, automotive consultant with Troy, Mich.-based International Business Development Corp.
``Ford's decision to participate sends a confusing message to suppliers,'' Parolini said. ``Traditionally, carmakers outsource to suppliers because of lower prices. Now they're essentially asking a supplier to pay higher wages to produce a seat.''
Parolini said a possible outcome if the UAW succeeds in aggressive organizing campaigns is for automakers to seek out nonunion plants in the South or in other countries to reduce costs.
One large Tier 1 supplier said the industry has grown large enough that it does not necessarily need Ford's business. That includes deciding which carmaker gets the benefit of the supplier's research and design solutions for the next generation of vehicles.
``It's a mutual selection process and not a unilateral decision by Ford,'' the supplier said. ``We'll work hard with any carmaker we contract with to improve efficiencies and develop technologies. But none of us relishes the possibility of getting burned again by Ford.''