A new UAW strike at a key supplier for GM has raised concerns about potential production disruptions for Chevy Silverado and GMC Sierra trucks.
Workers at Dauch Corp.’s axle plant, aka American Axle, in Three Rivers, Michigan, walked off the job Monday after contract negotiations failed to produce a new labor agreement. The facility supplies critical driveline and axle components used in several GM truck programs.
According to the UAW, nearly 1,000 workers are involved in the strike. Union leadership says employees are seeking wage increases after making concessions during the financial crisis nearly two decades ago. Workers currently top out at roughly $22 per hour, compared to about $29 per hour before concessions were made in 2008.
It comes at a particularly bad time for GM as it tries to ramp up production to take advantage of its long-time rival Ford struggling with aluminum shortages due to a major fire at one its key suppliers.
The strike immediately brings back memories of the 2023 UAW “Stand Up Strike” that we covered extensively. That historic labor action targeted Ford, General Motors and Stellantis assembly plants and parts facilities, creating supply chain disruptions throughout the industry before new contracts were eventually ratified.
This latest work stoppage is different because it targets a supplier rather than an automaker directly. However, supplier strikes can be just as disruptive if inventories run low.
Industry reports indicate GM currently has approximately two weeks of axle inventory available to keep truck production moving while negotiations continue. If the strike extends beyond that window, production of some of GM’s most profitable vehicles could be affected.
The Three Rivers plant produces axle assemblies and driveline components used in heavy-duty Chevrolet Silverado and GMC Sierra pickups, as well as midsize Chevrolet Colorado and GMC Canyon trucks.
GM said it is monitoring the situation and evaluating any potential impact on production. Dauch Corp. called the strike disappointing and said it remains committed to reaching a fair agreement with the union.
For now, Silverado and Sierra assembly lines continue operating normally. The real question is how long both sides remain apart at the bargaining table.
Given the importance of pickup truck sales to GM’s bottom line, expect both the automaker and suppliers throughout the truck supply chain to be watching this strike very closely.
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