UAW strike: Struggling with stoppages, suppliers urge US president to provide financial assistance

Policy & Regulation

The MEMA letter has cited "immediate concern" for smaller suppliers with revenue of less than $200 million

Source: Getty Images/imaginima

The Motor & Equipment Manufacturers Association (MEMA), a US automotive component supplier group, has urged US President Joe Biden to provide federal assistance to help auto parts companies impacted by the ongoing United Auto Workers (UAW) strike against the Detroit Three automakers, according to a news report published by Automotive News on September 26.

The report stated that MEMA, which includes the association’s Original Equipment Suppliers and Aftermarket Suppliers groups, had in a letter urged Biden to “effectuate federal assistance to ensure the viability of this critical industry sector. Without federal assistance, the ability of the automotive industry to resume full manufacturing capacity is at risk.”

MEMA wants the Biden administration to provide low-interest loans and consider loan forgiveness for tier 2 and smaller suppliers, who are already struggling with high operational costs and the UAW strikes.

Biden was in Detroit on September 26 to show support for the striking UAW workers.

Significance: UAW workers staged a walk-out at three manufacturing plants — one each of General Motors, Ford Motor Co. and Stellantis — on September 15. In a historic strike, which targeted three automakers simultaneously, the labor union workers have put out a number of demands that range from a 36%-40% raise in salaries, a significant hike in pensions and retirement benefits to scrapping the tiered-wage system, among several others.

The ongoing strikes have already hit the financials of the carmakers, with ripples making impact in the supply chain too. Notably, the strikes have led some auto suppliers to cut production and furlough staff.

The MEMA letter has cited "immediate concern" for smaller suppliers with revenue of less than $200 million. The association has urged the Biden administration to establish a Small Business Administration program or other agencies "to maintain workforce and operational capacity."

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