MEMA, which represents original equipment and aftermarket automotive parts suppliers in the U.S., found that about 40 percent of suppliers surveyed were forced to lay off some workers during the strike.
Harbour Results, meanwhile, estimated that about 11,000 auto maker and supplier workers were laid off, beyond the 45,600 workers who went on strike. And the Anderson Economic Group said Oct. 25 that the strike had cost the economy about $2.8 billion in lost supplier wages and earnings.
In an Oct. 31 statement, MEMA warned that "financial concerns over the smaller and lower-tiered" companies in the supply chain will continue to be a "significant issue" for the industry even as struck assembly plants ramp back up. Many smaller suppliers have found themselves in a precarious financial state since the onset of the pandemic, with higher costs, supply shortages and reduced new-vehicle production taking a large bite out of their bottom lines.
"Some of these companies, especially those that have lower revenues, were already very pessimistic before the threat of the strike," said Gabriel Rodrigues, a partner at consulting firm Falconi.
Suppliers in financial stress also are less likely to receive help from their banks given higher interest rates, Fream told Automotive News.
A recent survey by Harbour Results concluded that about 29 percent of manufacturers throughout the supply chain were "questionably bankable" based on their 2022 finances, meaning those companies had an unhealthy debt-to-earnings ratio. Another 21 percent were deemed "somewhat bankable."
"About 300 manufacturers gave us their balance sheet data from 2022, so what we're looking at is about 100 manufacturers are questionably bankable, in a situation where they might be getting phone calls from their bank or might not be able to secure additional funding," said Cara Walton, the director of market intelligence at Harbour Results. "There are a lot of concerns when it comes to the ability to run their business."
John Irwin, Automotive News staff, contributed to this report.