Executives at several tier one suppliers told Crain's that they have instituted furloughs and temporary pay cuts among white collar employees. Many have laid off factory workers, including Ford Bronco seating supplier LM Manufacturing, Magna, Flex-N-Gate, Detroit Manufacturing Systems, Detroit Chassis LLC, Sodecia Automotive, Eagle Industries, Faith Plastics and CIE Newcorp.
Dana Williams, chief strategy officer for Detroit at Work, said the agency has helped about 800 people who have been laid off over the past month. She said they generally haven't had trouble filling manufacturers' labor needs, but in some cases, impacted employees are ready to move on from the city's signature industry.
"I anticipate that there will be some folks who kind of naturally see this as a career transition, who might say, 'I always really wanted to be a nurse, I'm out, I'm going to nursing school,'" Williams said.
LM Manufacturing brought some laid-off employees back to work recently, Williams said, though it is unclear how many or what work is being done at the plant. Magna, a joint owner of the company, declined to provide details.
"We have focused considerable attention on contingency planning to proactively address any temporary business disruptions to our operations," Magna spokesman Dave Niemiec said in an email. "We've been prepared in terms of temporarily scaling back production on affected programs as efficiently as possible, and just as importantly we are equally prepared to ramp-up quickly when ready."
Uetz said some of her clients have tasked skilled labor employees with general maintenance work just to keep them on the clock while production is down. Many companies are anticipating employee demands for higher wages. "There will definitely be negotiations between the supplier and the customers for cost recovery on labor after this strike," she said.
Carrel said his labor costs depend on what his customers are willing to absorb. Automakers were generally willing to share some of the pain of the supply base these past couple of years, but that was a time of record profits for OEMs. They will emerge from the strike with dramatically higher labor costs and rising pressure to decrease costs elsewhere — such as parts purchasing — before foisting higher prices on the consumer.
"We were able to get some price concessions with our customers, but it was really tough to get some of that through. I'm not sure we could do it in another six months," Carrel said. "Obviously, you can't give what you don't have, from a profit standpoint. You gotta be careful that way."