Suppliers who live by the auto industry, die by the auto industry

B2BAnother day, another car model cancelled and another announcement of the closure of a production plant.

Earlier this week, GM announced plans to halt production next year at three assembly plants: Lordstown, OH; Hamtramck, MI; and Oshawa, ON, Canada. The company also plans to stop building several models now assembled at those plants, including the Chevrolet Cruze, the Cadillac CT6 and the Buick LaCrosse. President Trump doesn’t like it and has threatened to cancel GM’s subsidies for building electric vehicles (EVs). I’m all for this idea, by the way: If a company can’t make products that the masses want to buy, then why should my tax dollars go to subsidize unprofitable vehicles for a multi-billion dollar automaker?

GM’s announcement this week shouldn’t be a surprise, as it comes on the heels of Ford’s announcement earlier this month cancelling a few vehicle models of its own. Consumers are fickle. Just ask any restaurant owner or retail company. The only constant is change, as they say.

As pragmatic as that may sound, the automotive industry is huge and change comes hard for the thousands of employees who will be laid off and for the hundreds of Tier 1 and Tier 2 suppliers who will be affected. The long supply chain is littered with dead companies, many of them molders and moldmakers who bet the farm on the automotive business.

When I was selling injection molding and tooling for a mid-sized manufacturer, I had pondered the idea of approaching some of the Tier 1 suppliers like Delphi for some sub-contract business. I asked a colleague who was from the Midwest and familiar with the automotive industry about this idea. “With automotive, you’re either all in or you’re all out,” he told me.

Being an automotive supplier, even a Tier 2, takes total dedication to that industry. It also takes a thick skin and a willingness to play by that industry’s rules, which are written in stone . . . until the next purchasing agent decides they’re not.

Comments (0)

Please log in or to post comments.
  • Oldest First
  • Newest First
Loading Comments...