Scrambling to find auto parts, GM car dealers feel pinch in UAW strike

MEMPHIS — Car dealers are leaning on General Motors managers to find spare auto parts as the strike slows the output of oil filters, valves, rings and other items mechanics rely on to maintain the 30 million-plus GM vehicles on the nation's roads.

The pipeline stretching from factories to technicians working on GM's Buick, Cadillac, Chevrolet and GMC brands is far from dry, although car dealers and service managers report they regularly phone other dealers and salaried GM personnel in search of spare parts.

"We're starting to see parts in short supply," said Russ Clark, general manager at Cadillac of Knoxville. "That’s where we're going to see it hurt most if the strike goes on for a couple of more weeks.”

Even with the walkout stretching intoweek five, auto dealers remember this one isn't quite as dire at that long one 21 years ago. There's a reason. This isn't General Motors of yore.

75,000 non-GM workers hit by strike

Once the largest corporation on the planet with more than 600,000 workers worldwide and more than 100 major factories in the United States, GM has been pared down to 33 U.S. plants. Rather than make the bulk of the components fashioned into a vehicle, GM has followed rivals such as Chrysler, Nissan and Toyota and now buys a large share of auto parts from independent suppliers.

That has lessened the impact of a strike on motorists taking their car to the service center for repairs. Independent plants making items such as filters and valves didn't send all the workers on the shop floor home when GM closed down. As a result, the pipeline of parts flowing into dealers such as Cadillac of Knoxville in Tennessee is less full, Clark said, but hasn't had time to empty out since the strike began.

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United Auto Workers union leaders in Detroit ordered the walkout against GM after the four-year labor contract expired, putting about 48,000 UAW  members on strike beginning Sept. 16.

Late Friday night, UAW made a proposal to GM executives it said, if accepted, would constitute a “tentative agreement,” according to a letter posted to the UAW website.

The sides are divided over health care costs, use of temporary workers, production in Mexico, pension issues, wage gains, the decision to close four U.S. car assembly plants and lower anticipated employment levels in plants making future electric cars. 

When GM production ceased, hundreds of independent factories slowed down and reassigned workers to maintenance tasks. As the strike went on, these independent suppliers gradually laid off workers:

• UAW Local 1853 President Tim Stannard estimates independent suppliers have idled about 2,500 autoworkers in Middle Tennessee factories that make parts used in engines and vehicles assembled at GM's complex outside Nashville at Spring Hill, Tennessee.
• In Tennessee, GM employs about 5,000 workers at Spring Hill, including about 1,400 independent contractors, and nearly 200 workers at the Memphis distribution center. Most of these 5,200 workers are now idle.
• Throughout the nation, independent factories have laid off or reduced wages for 75,000 autoworkers, estimated Anderson Economic Group of East Lansing, Michigan.

Service techs pinched first

Auto dealers had a substantial amount of new vehicles on car lots when the strike began and many have been continuously resupplied new autos that were in storage awaiting delivery. That leaves the service center as the first place on the car lot to feel the early pinch of idled assembly plants.

"We're already seeing the effects of the strike, but it's mostly in parts," said Brett Gilmore, general manager of Beaman Buick GMC in Nashville, adding "we're not being hit quite as hard as the others."

Beaman's parts warehouse, said to be the largest GM parts inventory of any dealer in the Southeastern U.S., has supplied the dealer's service technicians with necessary items, Gilmore said. 

In Knoxville, Clark's dealership regularly phones other dealers, including dealers in neighboring cities, to locate a needed part or swap items. No consumer has missed repairs or maintenance. So far the shortage is just that, a shortage rather than a complete absence of necessary products, Clark said.

In the Memphis suburb of Southaven, Mississippi, Landers Buick GMC has resorted at times to another tactic. Landers officials phone GM salaried employees and alert them to looming shortages. These employees have included district and regional sales managers and executives responsible for replacement parts, a term known as aftermarket parts in the industry.

"So far the strike has not been a real issue for us but with time it could be,'’ said Randy Paton, Landers general manager. "The only drawback we've had is the parts availability. We've been talking to (GM's) managers, the aftermarket guys, and they're pulling parts for us."

GM salaried employees have combed through warehouses and engine plants, located needed items such as valves and rings, and immediately put the products into the distribution channel for delivery to the dealership. These channels are run by independent contractors not represented by the striking union.

'Doesn't have the same feel'

In Knoxville, Clark compares this walkout to the last long GM strike, in 1998, and remembers the shortages back then seemed more burdensome for dealers.

"This one doesn’t have the same feel," Clark said. "The inventory levels are good.”     

That's largely because the network of auto parts manufacturers has been changed over two decades, analysts say. GM now relies on independent suppliers. Back then the company made far more of its own auto parts.

Under the present system, many independent suppliers continued output even after the strike began on Sept. 16. They waited to see if the strike would be short. As a result, more inventory has been available in the auto parts distribution pipeline going to the car dealers than was common two decades ago.

What happened back then

That 1998 strike is widely considered the event that opened the way for GM to rework the supply chain into its present shape reliant on independent factories.

During the 1990s, GM and the UAW tangled in 18 major strikes as the company relentlessly streamlined in search of lower operating costs. The strategy was driven by GM's market share falling to Japanese rivals. The 1998 strike was the longest of the decade.

UAW members walked out at a pair of metal stamping plants that June in Flint, Michigan. The repercussions spread swiftly.  Auto parts made at the Flint stamping plants were routinely shipped to 26 of GM's 29 vehicle assembly plants.

Short of the Flint parts, assembly lines shut down and in turn almost all the 59 GM parts factories in the nation sent workers home. By mid July, about 200,000 GM employees were laid off.  One of the few assembly plants spared was GM Spring Hill, then a self-contained division named Saturn Corp. It continued running.

When the strike in Flint ended after 54 days, GM had lost more than $3 billion. GM executives in Detroit had sparked the strike. They had ordered important die machines' removal from one of the Flint stamping plants.

After the strike, the UAW was regarded as too exhausted to stop GM's broad turnaround strategy. The company, founded in Flint on Sept. 16, 1908, aimed to engineer and make vehicles and engines and buy most of the parts. GM spun off its 100,000-employee auto parts empire in 1999 as a new corporation named Delphi. It also separately retired the Oldsmobile, Hummer, Pontiac and Saturn brands. It weathered a 2009 bankruptcy that slimmed it further. And it recruited a network of independent suppliers rivaling Delphi.

Since then, Delphi has moved its head office from suburban Detroit to the United Kingdom, renamed itself Aptiv and spun off its powertrain and aftermarket business as an independent company named Delphi Technologies. Flint, meanwhile, has shrunk from a city of 80,000 GM employees in the 1960s to fewer than 10,000 GM workers currently.

The shrinking of the old GM auto-parts empire, once concentrated in the industrial North, helped spur on the automotive industry in Mexico and the Southeastern United States. Currently, 336 auto parts plants in Tennessee employ about 55,000 workers. Another 20,000 people are employed at the GM, Nissan and Volkswagen assembly plants and offices in Middle and East Tennessee. 

Last year, GM estimates, the company paid 203 vendors in Tennessee about $722 million for supplies. 

Elaina Sauber of The Tennessean contributed to this article.