A rocket could hurtle down the middle of Magna International Inc.'s previously bustling Versatrim plant in Howell, Mich., and not hit a soul.
The automotive plant is one of many recent casualties in the lingering strike between General Motors Corp. and two of its Flint, Mich., assembly plants represented by the United Auto Workers. All signs point to plastic part suppliers being ravaged by the union disagreement.
While GM and its Delphi Automotive Systems parts-making unit have laid off more than 190,000 workers, some analysts and company executives estimate the number of employees out of work at parts-supply plants is even higher.
``I've heard it said that for every General Motors worker, there are probably three employees at an auto-supply company,'' said a top executive at a company supplying plastic parts to GM. ``It doesn't really make a difference who comes out on top in the dispute. If future customers leave and suppliers can't compete, everyone loses.''
The toll the strike has taken on parts suppliers is as much emotional as it is financial. At the Versatrim plant, more than 400 hourly workers have been idled instead of molding plastic interior trim parts five days a week on two shifts.
The plant has been down since June 26, after GM shuttered most of its assembly plants in North America. Only a few salaried employees are still on the job at the eerily quiet Magna facility.
``This is the big one as far as strikes go,'' said Versatrim General Manager Ken Shaner. ``We're 100 percent GM [in sales], so we had no choice but to lay off our workers.''
The strike, which as of July 24 was completing its seventh week, has gathered momentum like a tornado dusting off buildings one by one. Many suppliers had hoped the sides would have settled during GM's two-week maintenance shutdown, when many suppliers also pared operations.
Yet, GM's annual shutdown ended July 13 without a labor agreement. Since then, temporary layoffs have stepped up in force as plant inventory levels peak and work no longer can be shunted to other, non-GM programs, said automotive analyst Dennis Virag of Automotive Consulting Group Inc. in Ann Arbor, Mich.
Virag said that lost supplier sales — those not likely to be recouped once the strike ends — top several hundred million dollars a month.
``The longer it goes, the greater the impact on suppliers,'' Virag said. ``The losses accumulate, and a supplier can only shift so much business from GM. And even if a supplier lays off people, the company still must carry fixed costs in equipment and overhead that becomes a terrible burden.''
The burden is becoming heavier for Webster Plastics Inc., a Fairport, N.Y., maker of plastic under-the-hood parts. After managing until now to keep operating, the company will begin layoffs this week, said company President Vern DeWitt.
The company expects to lose about one-third of expected sales each week and several million dollars a month for the strike's duration, DeWitt said.
``We've done all we could do in the short term to dodge that bullet,'' said DeWitt, whose company does about 30 percent of its business with GM. ``Normally, when a strike lasts two or three weeks, we can make up what was lost. I don't think it's possible this time.''
A mounting crisis scenario also faces Nicholas Plastics Inc., a $50 million automotive extruder and injection molder in Allendale, Mich. As the strike has stretched over the summer, the company has laid off half its 300-person work force, said Chief Operating Officer Carl Brown.
The work stoppage, which primarily has affected its Allendale facility, qualifies as one of the most serious situations afflicting the company in 20 years, Brown said. The extruder does more than half its business with GM.
``It's been gradual,'' he said. ``When our inventories reached a certain level, we had to adjust work schedules. In recent times, we've never before had a forced layoff.''
The strike has forced some molders to make operating changes. Injection molder Siegel-Robert Inc. of St. Louis asked employees to go on voluntary layoff after work schedules needed to be trimmed, said Michael Honigfort, vice president for product design and methods engineering.
ADAC Plastics Inc., a Grand Rapids, Mich., molder of plastic door handles and other parts, has cross-trained its 550 workers on different functions to allow them to move easily to different product lines, said Jim Teets, vice president of sales and marketing.
Still, ADAC does about 20 percent of its yearly business, or $18 million, with GM, he said. ``It hurts us like it does everyone else.''
And molder Cambridge Industries Inc. in Madison Heights, Mich. is using the slowdown to focus on lean manufacturing techniques. The molder is working with employees to find ways to cut fat from programs, improve time management and increase plant efficiency, said Paul Von Jankowsky, director of marketing communications. He said the molder has laid off several hundred employees at three plants.
A litany of large, publicly traded plastic molders reported dramatic losses in earnings and several rounds of temporary layoffs due to the strike. Among those weighing in were:
Lear Corp. of Southfield, Mich.—The interior-parts suppliers tallied more than 3,100 workers on temporary layoff, close to 8 percent of its work force in North America. Last week Lear shut its Ajax, Ontario, plant that made plastic interior trim and seat parts for GM pickups. Lear estimates it is losing $30 million to $35 million a week in sales, and has seen earnings drop 14 cents per share in its second quarter, said spokesman Tony De Lorenzo.
Johnson Controls Inc. of Plymouth Mich. — Lear's interior-parts competitor has idled 1,765 workers, about 500 of them in the past month, said spokesman David Roznowski. The strike has affected workers at eight interior-parts plants, many of them making molded parts, and at four seating plants, he said.
Collins & Aikman Corp. of Charlotte, N.C. — The supplier's C&A Plastics Inc. injection molding unit, based in Troy, Mich., has laid off 1,550 workers, representing 62 percent of its work force, said spokeswoman Kim West. The firm as a whole estimates it is losing about $50 million a month from the strike, she said.
Privately held LDM Technologies Inc. of Auburn Hills, Mich., has laid off 1,071 hourly and salaried workers at six plants, about 23 percent of its work force, said spokeswoman Caryn Hall. Only about 20 workers remain at injection molding plants in Byesville, Ohio, and Leamington, Ontario, which together normally employ 830, she said.
The strike's devastating effects could continue once a settlement is reached, said Virag. ``The smaller guys that absorb the losses and some larger guys that are too highly leveraged can't come out of this in good shape,'' he said.