Mexico. The National Auto Parts Industry (INA) estimated for the end of this week, as of October 20, a cumulative decrease of 600 million dollars in Mexican auto parts production due to the ongoing strike between the UAW and the three major Detroit manufacturers.
This would be equivalent to approximately 0.8% of Mexican exports of auto parts to the United States in 2022.
Meanwhile, MEMA's most recent survey of original equipment suppliers reveals the impact of the strike on the vehicle supply base.
Vehicle suppliers employ more than 900,000 workers, more than six times more than the 146,000 auto workers in the UAW Detroit Three. In addition, suppliers contribute 2.5% of the U.S. Gross Domestic Product (GDP) and operate in all 50 states.
According to MEMA's survey, collected Oct. 9-11, layoffs have increased nearly 10% week-over-week and 39% of vehicle suppliers surveyed have laid off a portion of their direct employees.
Of the suppliers that have not initiated layoffs, half indicated that they will begin laying off direct employees the week of Oct. 30.
More than 30% of suppliers surveyed indicate that they will need more than a week and up to more than three weeks to increase idle production. The biggest challenges to restarting operations are regaining the availability of labor and materials.
Nearly 80% of suppliers are concerned about the financial viability of their sub-suppliers, while 30% of these suppliers express some concern regarding their internal financial viability.
MEMA said it continues to affirm the importance of federal action to support the U.S. essential provider base and work with the White House to develop a plan to provide financial assistance to smaller providers.
According to MEMA, the output of these suppliers, often Tier 2 or lower, is critical to the continued viability of the entire supply chain.
