While the United Auto Workers strike against General Motors enters its fourth day, economists are saying it would take long work stoppage to affect the U.S. economy.
The same can be said by Southwest Michigan manufacturers.
Dan Mitchell, president of Hanson Mold in St. Joseph Township, said the company – along with its customers – are keeping an eye on the strike and hoping for a resolution.
“In general, our customers are seeing some of their volume potentially being cut,” Mitchell said. “We have a diverse customer base, so we won’t be affected in the short-term.”
Mitchell said at least one of Hanson Mold’s customers, who make automotive parts for GM, have seen their volumes cut back.
Mitchell said he learned of the strike when he was driving into work Monday.
He said the ripple effect from the strike isn’t expected to spread far if the strike lasts a matter of days, as the drop in production should be recouped once it ends.
According to a Wall Street Journal article, if the strike lasts longer than a couple of weeks and prompts GM to call off supply schedules, economists predict the impact could spread up the supply chain to auto parts suppliers, electronics, steel and glass companies, and auto dealerships – which could cut jobs in response.
Those same economists say the main outcome will be lower manufacturing production, which in turn, would add a dent in consumer spending, incomes and tax revenues in areas where assembly plants are located.
When factory workers at GM went on a nationwide strike Monday, it marked the UAW’s largest work stoppage in more than a decade.
In 1998, about 9,200 workers at two parts plants in Flint walked out for 54 days, shutting down GM production and causing sales to plummet.
Mitchell said he was on the floor of Hanson’s plant in 1998, and doesn’t know the extent of what that strike meant for the plastic fabrication company.
“I doubt it had much of an effect on us at the time. Being a tool and die building, it takes quite a long time for it to reach us,” he said. “There’s not that same immediate impact from our customers. That’s probably why we don’t feel the impact as soon, if ever. It’s still a concern for us. It can be disruptive to our customers.”
The auto industry’s integrated supply chain means that outside the auto industry, reductions in auto parts orders could eventually take a toll on manufacturers of steel, plastics and other raw materials.
Steve Jackson, owner of West Michigan Tool & Die in Benton Harbor, said his company is concentrated on about 80 percent automotive, in terms of output.
Like Hanson Mold, Jackson said West Michigan Tool & Die has a diverse range of products and consumers.
“The production and tooling would be one value stream,” he said. “We now do custom machining, prototyping and Swiss machining.”