Automotive Insiders host Jason Stein interviews Warner Norcross + Judd LLP Partner Homayune Ghaussi about two very big and important topics: The UAW Big Three looming strikes and the AirBoss Michigan Supreme Court decision on blanket orders.
Homayune provides key advice for suppliers preparing for the strike, which center on contract review and understanding suppliers’ ability to stop orders from all sides. He urges suppliers to plan for labor force adjustments as well. Logistics and workforce management, along with how suppliers communicate to their customers and suppliers will make all the difference in successfully weathering a strike and ramping back up when it’s over.
For decades, automotive contracts were done through blanket orders with releases to follow. In July, Warner represented AirBoss Flexible Products Co. in MSSC, Inc. v. AirBoss Flexible Prods. Co., the first case to interpret a key provision of the Uniform Commercial Code in nearly 40 years – and one that has made an impact on suppliers up and down the supply chain. This decision is now requiring quantities to be included in contracts. No longer can these contracts be one-sided where suppliers are obligated to supply product, but the buyer is not obligated to buy. Homayune urges suppliers to review their contracts or terms and conditions and advises that suppliers first analyze weaknesses in their contracts or supply base before making changes.
For more information on supply chain issues impacting automotive suppliers, please contact Homayune Ghaussi or a member of Warner’s Automotive Industry Group.