Foley & Lardner LLP partner Nicholas Ellis is quoted in the Law360 article, “UAW Strike Roils Auto Industry Supply Chain,” explaining how the unpredictability of the autoworkers’ walkouts have made it difficult to measure the potential impact to suppliers.
“Unfortunately, they don’t have a great deal of visibility into this,” Ellis said. He explained that though the impact might be felt more acutely at so-called Tier 1 suppliers that contract directly with the automakers themselves, it is difficult to say how Tier 2 and Tier 3 parts suppliers will fare, as that depends on the scope and duration of any U.S. work stoppage.
While suppliers still have to fill orders from their customers, Ellis noted that “they may find out tonight that those parts they have built, all the components and the materials ordered, their customer is going to say, ‘Well, sorry, I can’t take those because my plant is on strike.'”
“The supply chain has had issues going all the way back to the beginning of COVID. It just seems like it’s one thing after the other. If it’s not the impact of the pandemic itself, you’ve got ships sideways in the Suez Canal, increased costs across the board for materials, increased costs for labor,” Ellis added. “And unfortunately, a lot of suppliers really have been squeezed by all that.”