General Motors' suppliers are feeling the pain caused by last week's UAW strike at American Axle & Manufacturing Holdings Inc.
The axle shortage that shut production last week at GM's Pontiac (Mich.) Truck assembly plant means GM's seat and other parts suppliers lost business. The plant builds 433 Chevrolet Silverado and GMC Sierra pickups daily.
But even the run-up to the strike affected other GM suppliers, said Erich Merkle, forecasting vice president for IRN Inc. in Grand Rapids, Mich.
In the weeks leading up to the strike, which began Tuesday, Feb. 26, GM increased pickup and SUV production to build dealer inventory, Merkle said. In a soft market for trucks, that had suppliers working and paying overtime.
Now those suppliers are looking at potentially lengthy down times either as a result of the strike or to allow GM to shrink its bloated inventories if the strike is a short one, Merkle said.
"The American Axle situation adds a degree of production volatility that is expensive from a supplier perspective," he said.
GM has forecast an 8.4 percent cut in North American light-truck production in the first quarter, to 608,000 units from 664,000 in the year-earlier period. Yet GM increased truck production in January to 179,246 vehicles from 167,729 the previous January.