The strike in the US auto sector is expected to impact Canadian parts manufacturers

TORONTO – Auto workers in the U.S. extended their strike on Friday, in what is expected to have knock-on effects for Canadian parts makers.

The extended strike resulted in members of the United Auto Worker demonstrating at 38 General Motors and Stellantis parts distribution centers in 20 states. That added 5,600 workers to the 13,000 who began strikes last week at three Ford, GM and Stellantis assembly plants.

“It spreads the pain to a new level,” said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions.

The addition of distribution centers increases the likelihood of supply chain disruption and impact on Canadian parts suppliers, he said.

“As time goes on, parts suppliers become more and more handicapped, and it gets worse the smaller the parts suppliers themselves are. So the smaller Tier 2 and Tier 3 suppliers are really going to be hurt.”

Canadian companies operating in the U.S. have already been affected by the strike.

Magna International Inc., based in Aurora, Ont., confirmed that LM Manufacturing, a joint venture in which it owns 49 percent, has temporarily laid off about 650 employees because the plant is supplying seats to a shuttered Ford Bronco plant.

However, Ford was spared from Friday’s extended strike as UAW President Shawn Fain said the union had made progress in negotiations with the company.

In Canada, Ford averted a strike on Tuesday by reaching a tentative agreement with Unifor that members will vote on this weekend. The results are expected on Sunday.

Unifor national president Lana Payne said the agreement, expected to serve as a blueprint for contract negotiations with GM and Stellantis, addresses important issues such as wages, pensions and the transition to electric vehicles.

This report by The Canadian Press was first published Sept. 22, 2023.