Axle Strike Idles Secondary Suppliers

by Robert Farago

Published: March 4th, 2008

While GM's Board of Bystanders was busy congratulating GM CEO Rick Wagoner and CFO (now COO) Fritz Henderson for the company's " tremendous progress," its suppliers were busy suspending ops. Automotive News [sub] reports that the American Axle strike that has idled six soon-to-be-seven GM plants is taking it toll throughout GM's supply chain. "Lear Corp., the seating supplier to GM's light trucks, has laid off 700 employees and idled one plant, spokesman Mel Stephens said. 'Where GM production is down, we are down,' said Stephens. He said four more plants are operating at reduced speed and more closings are expected." Interior supplier (and Chrysler suitor) Magna International says it's "adjusted its production schedules." The plant closures' ripple effect on other suppliers is sure to spread quickly and widely. As of this writing, no new negotiations between American Axle and its United Auto Workers members are scheduled. Even if the strike was resolved today, restarting production would be an expensive and time-consuming process, that GM and its other suppliers can ill-afford.