Foley & Lardner LLP partner Ann Marie Uetz is quoted in the Supply Chain Dive article, “UAW strikes: What’s next for auto supply chains after labor deals?” discussing the outlook of the industry following the ratification of labor agreements between the United Auto Workers and major automakers.
Uetz commented that Detroit’s automakers are expected to ramp up production for lost time, meaning that suppliers will also be working to catch up.
“We’ve already seen other [OEMs] agree to pay higher hourly wages as a result of the UAW strike, and suppliers will likely be next — especially the larger tier 1 suppliers,” she said.
Some suppliers are opting to run extra shifts to catch up on production, Uetz explained. She said that some customers are choosing to extend payment terms, and suppliers need to be vigilant in order to get paid in a timely manner.
Uetz noted the importance for suppliers to manage customer contracts to ensure they are aware of their rights and obligations. “Watch for things like amended purchase orders or terms and conditions, and consider whether to accept or object to them as they are issued — there can be traps in those amendments,” she said.
Uetz added that some expect non-union employees to seek “higher wages after seeing what the UAW was able to achieve with the Detroit 3.”