Labor Disputes Hit Home for Northeast Ohio Parts Suppliers

Strategic Insights -

The labor problems at General Motors Corporation are affecting local auto industry suppliers in Northeast Ohio, leading to layoffs, shutdowns, and shortened workweeks. Several companies have been forced to adjust their production schedules in response to the strikes that started on June 5 at two GM parts plants in Flint, Michigan, idling nearly all the automaker's U.S. assembly plants. The impact of the strikes has become more acute in recent weeks, with many suppliers struggling to cope with the uncertain production outlook.

Key Takeaways:

  • Midland Steel Products Co. in Cleveland will lay off 61 workers effective July 20 due to shutdowns at GM's medium- and heavy-duty truck operations nationwide.
  • Com-Corp Industries Inc. has laid off about 40 of its 120 production workers and has gone to a four-day workweek, affecting 25% of its business with GM.
  • Bliss Technologies Inc. has cut its production schedule to four days from five, but has not furloughed workers, citing worker training programs on the fifth day.
  • TRW Inc. in Lyndhurst cited the GM shutdowns as contributing to a 6% decline in second-quarter earnings.
  • David Garrick, an Ohio Bureau of Employment Services spokesman, estimated that at least 7,000 jobs at independent supplier plants in Ohio could be affected by the GM shutdowns.
  • John Reichbaum, president of UAW Local 2400 at TRW's valve plant, stated that management has told union officials that the strikes at GM would need to extend several weeks before cutbacks would be necessary at the 650-employee plant.

Statistics:

  • 61 workers will be laid off at Midland Steel Products Co. effective July 20.
  • 40 workers have been laid off at Com-Corp Industries Inc., representing about 33% of its workforce.
  • 120 production workers at Com-Corp Industries Inc. remain employed at the company.
  • 600 employees work at Bliss Technologies Inc. in Newton Falls.
  • GM accounts for about 20% of Bliss Technologies Inc.'s sales.
  • 6% decline in TRW Inc.'s second-quarter earnings due to the GM shutdowns.
  • 7,000 estimated jobs at independent supplier plants in Ohio affected by the GM shutdowns.

Sources:

  • [1] Salomao Ioschpe, president of Midland Steel Products Co.
  • [2] Tom Stanciu, president of Com-Corp Industries Inc.
  • [3] Richard Horn, director of human resources at Bliss Technologies Inc.
  • [4] Jay McCaffrey, TRW Inc. spokesman
  • [5] John Reichbaum, president of UAW Local 2400 at TRW's valve plant
  • [6] David Garrick, Ohio Bureau of Employment Services spokesman