The Cost of Upstream Strikes

Abstract

Modern management practices stress the importance of removing buffer stocks and reducing parts inventories in pursuit of lean manufacturing. These techniques can increase exposure to upstream disruptions. We examine the impact of a major IAM aerospace strike on productivity downstream at an aircraft manufacturing plant primarily represented by the non-striking UAW. This event seeded a split both between the unions and within the UAW local, with long-term repercussions. Mass layoffs began downstream 26 days after the upstream strike. Downstream assembly costs increased by 47% during the strike and remained elevated for months.