Like the big kid who belly flops into a swimming pool, a strike-bound General Motors is making waves for its parts suppliers.
Industry analyst Craig Cather said he expects shutdowns at GM plants will affect 400 suppliers.
'It's fairly wide ranging, involving virtually any company supplying parts for GM,' said Cather, president of CSM Corp., a consulting firm in Okemos, Mich., that specializes in supplier issues.
Few suppliers have as much exposure to the strike as Detroit's American Axle and Manufacturing Inc., which derived 96 percent of its $2.2 billion in sales last year from GM.
The walkout at GM's Flint, Mich., plants forced layoffs of 1,800 workers at American Axle, and more are expected this week, said Larry King, president of UAW Local 235.
The strike comes at an awkward time for American Axle, which hopes to raise $115 million this summer from the sale of common shares. Spokesman Steven Hoff-man declined to comment.
MINOR IMPACT - SO FAR
Other companies dependent on GM for a big percentage of revenues include LucasVarity PLC and Hayes Lemmerz International Inc.
GM accounts for 20 percent of Hayes Lemmerz's sales of wheels, but the Romulus, Mich., supplier has not laid off many of its 3,600 North American employees.
'Every day it goes, it has an impact, but it's minor so far,' said company spokesman Dennis Richardville.
If the strike stretches longer than a few days, LucasVarity could take a significant hit. The London-based company is a major supplier of antilock brakes for GM trucks, generating sales of $672 million to GM last year. This week, LucasVarity expects to start cutting ABS production in its Fowlerville, Mich., plant.
New Venture Gear Inc. depends on GM for nearly half its sales of transmissions and driveline components. The Troy, Mich., supplier might keep production lines open for a while to build up inventory. But the company cannot avoid layoffs for long, said a spokeswoman.
SEAT MAKERS ADJUST
In any automotive strike, seat makers are nearly always the first suppliers forced to shut down. That is because suppliers typically ship their seats several times a day on a just-in-time basis.
Lear Corp. - which does 27 percent of its business with GM - is no exception. The Southfield, Mich., supplier said late last week it had already closed three of its automotive interiors plants.
Meanwhile, Johnson Controls Inc. has idled two seat plants in Indiana and New Jersey, plus a components plant in Tennessee. Johnson Controls, whose automotive group is based in Plymouth, Mich., obtained 11 percent of its revenue from GM last year, according to the company's financial report.
Freudenberg-NOK, also of Plymouth, last week put two plants on a four-day work schedule. Sallianne Williams, vice president for global customer support, said overall production is down 10 percent, but the engine-components company continues to build its inventory for GM's Chevrolet Silverado and GMC Sierra full-sized pickups.
Intermet Corp. had hoped for a 50 percent gain on its GM sales this year, thanks to added content on the automaker's new truck line. Now the Troy, Mich., cast-metal components company is taking a wait-and-see approach, said CEO John Doddridge.
Less visible is the impact on the many smaller GM suppliers. Flexible Products Co. of Auburn Hills, Mich., was expected today, June 15, to lay off 24 employees, or 15 percent of its work force. The company had $45 million in sales last year.
Glenn Reid, the company owner and president, said Flexible Products will continue producing parts for GM, but will hold them for inventory. Reid is a just-in-time supplier, which means his inventory is lean; if the strike continues, more layoffs may follow, he said.
With workers walking out Thursday at a second Flint plant, the strike appears to be shaping up as GM's costliest since a 17-day shutdown at Delphi Automotive Systems brake plants in Ohio in 1996. That cost the company an estimated $900 million.
Many large suppliers report minimal impact so far. Borg-Warner Automotive Inc. of Chicago, a major supplier of components for transmissions, is continuing to supply GM plants. But if the strike continues this week, 'We will feel some impact,' said Mary Brevard, director of investor relations and communications.