GM has a parts incentive program that dealerships rely on for profit. GM temporarily adjusted the program but was still reducing rebates to stores that didn’t meet loyalty metrics, Frye said.
“Most dealership staff relies on commissions generated from gross profits for their personal earnings,” Frye said. “Since costs are higher and margins are lower due to the strike effect, lower paycheck amounts are being earned by these folks, and the longer the strike goes, the lower their pay will be.”
Casa Automotive’s GM stores typically buy GM parts, but Drake advised his service departments to put the customer first. That means they had to buy from other parts providers.
“I’m going anywhere and everywhere,” Drake said. “Wherever I’ve got to go to buy a part — Amazon or some parts distributor — that’s where we’re going to go.”
Workers have been laid off at suppliers including Adient, Cooper-Standard, American Axle & Manufacturing, Lear Corp., Magna, ZF North American, Busche Performance Products, Android Industries and others.
Phoenix Transit & Logistics, a trucking company in Dearborn, Mich., laid off almost its entire staff, owner Wael Tlaib told The New York Times. Tlaib said he pulled from his personal savings to keep the company running and was afraid he could lose the business as early as this week, the newspaper reported.
A manager at a Michigan supplier that has laid off more than half of its work force because of the strike told Automotive News that Anderson Economic Group’s estimate of 75,000 supplier layoffs as of last week might be understated. The vast majority of the supplier’s business is from GM.
The strike has created “a stain on the economy that no one will be able to clean up,” said the person, who asked not to be identified. “Any sales that would have been generated during those four weeks has been severely compromised. We will survive, although we will have a serious stain on the year’s performance.”
For suppliers that are highly dependent on GM, one-twelfth of the year has been wiped out, the person added. “That would take what might have been a good or a very good year and blow it up. The trickle-down effect of this is massive.”
Melissa Burden contributed to this report.