Indianapolis — Plastics processors will see their share of the automotive manufacturing industry grow in the years and decades ahead as lightweighting becomes more important during the transition to electric vehicles.
But, in the short term, the uncertainty of the current United Auto Workers strike is leaving the sector with potential vulnerability, representatives from business advisory firm Plante Moran said Oct. 5 during the Benchmarking and Best Practices Conference in Indianapolis.
While the UAW only has so far targeted specific plants operated by General Motors, Ford and Stellantis, the potential for wider work stoppages hangs over suppliers.
Ted Morgan and Mark Barrott are both partners with Plante Moran, which has a significant practice working with plastics companies.
"Plastics processors have to have a very good understanding of what plants are striking and how it impacts the production releases," Morgan said.
"The further you get down the food chain, like a Tier 2 or Tier 3 supplier, and if you are a plastics processor, oftentimes they don't know. They literally don't know where their parts are going, particularly if they are in under-hood applications. They could go on multiple powertrains," he said.
And that lack of knowledge, while not critical during the good times, is a weak spot during difficult periods.
"You just have to really keep an understanding because that can help you forecast what your production will be as these plants continue to stay down," Morgan said.
"In stable times, it doesn't matter if you are a Tier 2 or Tier 3 supplier," he said. "Now it matters."
"You have to keep a very good pulse on where your products are going. That's a very-easy-to-understand concept if you know you have already seen production releases down based on vehicles not being produced. But I think they need to go a step further and you have to know the nameplates you are on for future vehicles that could be down through future strikes," Morgan said.
Morgan said most plastics processors serving the automotive industry do not have a disproportionate amount of their work concentrated on one vehicle, so that flexibility helps mitigate risk.