GM Plant Closings Will Hit Parts Suppliers Far And Wide

The results of General Motors’ (GM) major restructuring along with its plan to close five North American factories in the next few months will cause a ripple effect for the many jobs in the auto parts suppliers industry.

GM is expecting almost all of its US blue-collar workers whose jobs are going to be eliminated to be able to get jobs at other auto manufacturing plants that are increasing their employment rolls, however that will not be the case for those workers who work for companies that make parts or drive trucks or work in warehouses that has kept GM’s plants operating.

There may not be jobs for them to fall back on.

According to Dave Green, a union leader near Youngstown at a plant where GM plans sometime in early March to shut down its factory that makes the Chevrolet Cruze compact car, says that there is really nowhere for those workers to transfer to.  They will just be out of work he says.

Some workers in supplier factories already have lost jobs and have not been able to transfer to another similar job elsewhere since GM’s Lordstown factory cut its shifts down to one last May before it announced plans of closing it altogether.

Union Leader Green has a list of more than 50 businesses that are tied to GM’s assembly plant in Ohio. But he says it’s hard to tell how deeply it will affect those supplier businesses because they do supply parts and services to other auto plants and industries.

However, economists have projected that for every automotive worker that is cut, the ripple will be three or four positions that could be eliminated in supplier factories. Their records show that auto plants and manufacturing across the board create more jobs in other areas than any other industry in the US.

The United Auto Workers Union is working on negotiations to keep plantsfrom closing, particularly GM’s assembly plants in Detroit, Michigan and Oshawa, Ontario, Canada and transmission plants in Warren, Michigan and near Baltimore, Maryland.

The greatest impact of the ripple effect from the possible GM plant closures will be on the supplier plants that are located closest to the GM plants because their customer base is almost wholly dependent on GM rather than having a broader customer base.

Nevertheless, parts suppliers all over the world will be affected. Guy White, a UAW union shop chairman in Marylandsays that a lot of the parts that go to GM’s Baltimore transmission plant are received from supplier plants in other states and even from Mexico and Canada. White says the supply chain is huge.

Some employees working for supplier companies are already looking for jobs elsewhere outside of the auto industry, for instance, in the medical field. This is feasible for younger workers who can receive benefits through state programs that assist laid-off workers. But what about the employees who are about to retire? Will they receive their retirement package if plants close down? And how do they find alternative jobs so late in life? Will they be able to survive?