Ford Motor Co. CEO Jim Farley speaks to reporters about the contract talks with the United Auto Workers union at the North American International Auto Show in Detroit on Wednesday. Paul Sancya/Associated Press

As the United Auto Workers union is poised to go on a targeted strike against Detroit’s three biggest automakers just after midnight Friday morning, Biden administration officials are preparing economic measures to protect suppliers to the auto industry from long-term damage, according to three people aware of internal conversations.

While the administration is not expected to intervene in a strike, Biden aides are worried that a protracted walkout could wipe out the thousands of suppliers that depend on the auto business from the three key automakers, Ford, General Motors, and Stellantis, said the people, who spoke on the condition of anonymity to describe private deliberations.

The widespread failure of those smaller supplier firms – which number as many as 5,600 – could impede the broader U.S. auto supply chain even after the possible strike ends, according to the people.

It is unclear what form the aid would take, but one option would be for the Labor Department to provide grants to assist workers at firms affected by a strike, two of the people said. Another option could be for the Small Business Administration to provide favorable loans to these firms. The discussions about these measures are preliminary, and talks remain fluid.

“The administration wants to be sure to do what it can to protect the Detroit supply chains,” one administration ally said. This person also spoke on the condition of anonymity to describe private conversations. “They have to worry about how some of the less well-capitalized firms could be at risk.”

A White House spokeswoman declined to comment on any internal planning.


If the UAW goes on strike this week, it would be the first against an auto company since 2019. Talks are tense, even though the auto companies have significantly improved their wage offers to union workers. Ford is proposing a 20% raise over 41/2 years, up from its initial offer of 9%. General Motors is offering an 18% raise over 41/2 years, up from 10% earlier. And Stellantis, the parent company of Jeep and Chrysler, is offering 17.5% raises over that same period, up from 14.5%.

UAW president Shawn Fain called the offers inadequate, given that inflation has soared in recent years while automaker profits and chief executive pay have ballooned.

Any strike, particularly if it drags on, would destabilize an industry that makes up about 3% of the nation’s gross domestic product. The UAW’s 150,000 automotive members produce nearly half of the light vehicles manufactured in the United States, according to analytics firm GlobalData.

A strike that significantly hurts auto production would quickly ripple out to affect suppliers and other businesses in auto-manufacturing communities. As auto factories shut down, those businesses would stop ordering parts. Many auto parts suppliers are still trying to recover from long shutdowns during the pandemic and would be clobbered by another disruption, analysts say.

“If there is a strike, the impact will be felt much more quickly than people realize, and I am worried about those consequences,” said Rep. Debbie Dingell, D-Mich. “For a lot of the suppliers, their profit margins are not very big. A strike will have real economic consequences very quickly, and we cannot leave the workers behind.”

Dean Baker, a White House ally and economist at the Center for Economic and Policy Research, a left-leaning think tank, said there are limits to what the Biden administration could do in an extended strike. But it makes sense for the administration to consider measures to help protect Detroit’s suppliers where it can, he said.

“Probably the best thing they can do is to try to arrange some bridge loans. I’m sure they’re looking into that as an option,” Baker said. “If (the strike lasts) six months, it’s hard to see how a lot of them get through it. But if there’s a two- or three- or four-week strike, a loan could maybe go a long way to keeping them in business.”

The automakers have stressed that they are striving to negotiate a fair deal, with bigger wage hikes than they have offered in years. But they have said they can’t meet all of the union’s demands without hobbling their future investment and growth. They have argued that a big hike in their labor costs, or a prolonged shutdown, would undermine their efforts to scale up production of electric vehicles – a major undertaking that is costing the global auto industry tens of billions of dollars.

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