Legal Success Strategies for your post-UAW Strike Auto Startup

Nov 2, 2023

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In this episode of the Automotive Leaders Podcast, host Jan Griffiths engages in a conversation with Daniel Rustmann, an industry expert with over 30 years of legal experience in supplier-related matters. They explore the unique challenges the automotive supply chain faces during and post-UAW strike.

Daniel, a co-chair of the global automotive practice at Butzel Long, provides valuable insights into the legal and contractual aspects influencing the ability to restart operations swiftly. He emphasizes that while contractual obligations often favor OEMs, a cooperative approach may be more effective in resolving disputes. The discussion also highlights the intricate interconnectivity within the automotive supply chain, emphasizing the importance of aligning terms and conditions to ensure a seamless flow of expectations.

The significance of proactive risk assessment and open communication within the supply chain is evident throughout the conversation. Maintaining healthy supplier relationships, keeping in touch with employees, and fostering positivity are key takeaways. This episode underscores that, while legal considerations are crucial, a collaborative approach, coupled with positive leadership, holds the key to overcoming challenges and transforming the automotive industry in the face of adversity.

Themes discussed in this episode:

UAW Strike and supply chain challenges
Swift restart of operations
Contractual and legal considerations
Communication and collaboration
Risk assessment and preparedness
Leadership and positivity
Opportunities for transformation

Featured Guest: Daniel Rustmann

What he does: Daniel Rustmann is the Co-Chair of the Global Automotive Practice at Butzel Long; he is highly respected in the automotive industry for his work in the supply base.

On leadership: “Every time we face a serious challenge, that also comes with a serious opportunity. And this is an opportunity for people to step up and show their leadership and show their poise, show their creativity, show their grit to be able to get through the situation like we always do like the industry always recovers.”

Mentioned in this episode:

UAW Strike: Preparing for a Successful Industry Restart, episode with Thomas Kowal, President of Seraph North America
MEMA - Motor & Equipment Manufacturers Association (formerly OESA)
FMEA - Failure Modes and Effects Analysis

Episode Highlights:

[00:01:26] Legal Challenges and Swift Startup Post-UAW Strike: Explores the legal and operational hurdles in the automotive supply chain post-UAW strike, focusing on the need for swift startup and effective communication across tiers.

[00:07:41] Contractual Preparations for Supply Chain Recovery: Critical aspects of supplier contracts are discussed. Dan advises suppliers to review their contracts, especially concerning payment issues, proactively. Understand rights and obligations and establish a clear paper trail to prepare for a rapid startup.

[00:14:27] Prioritizing Collaboration in Supplier Contracts: Dan and Jan stress the significance of proactive discussions in supplier contracts, focusing on quality, delivery, and issue resolution. Their approach prioritizes collaboration over legalities, enabling suppliers to better prepare for supply chain challenges.

[00:21:09] Embracing change and leading through crisis: This highlight focuses on authentic leadership during times of crisis and the potential for transformation within the automotive industry amid challenges.

[00:25:22] Dan's pro tips: Dan provides three essential tips for automotive suppliers: legal preparedness, effective communication, and positive adaptation.

Top Quotes:

[00:02:27] Dan: “We can expect that when an agreement is reached, the OEMs will want supply to start immediately. And they will push hard to have everybody up and running yesterday with very little notice. So that will certainly be the largest obstacle everybody faces.”

[00:16:17] Dan: “It's impossible to make a perfect contract that could address every situation; however, you can have a good contract, you know, one that is very clear and negotiated upfront”

[00:16:43] Dan: “I've been advocating for years that you might have more leverage than you think. You may be able to provide some protection for yourself. And I'm not talking about doing a massive red line of the terms and conditions. I'm talking about the fundamental issues that will seriously impact whether you make money or lose money from this contract in the long term: price adjustment, return of capital, and protecting your intellectual property.”

[00:21:15] Dan: “I strongly believe you should have a little faith. Our industry has recovered from many things in the past, and we as individuals have recovered from many things in the past; we have to have a certain amount of positivity about our approach… And we must be able to turn it over to a certain extent and think; maybe I can come out of this stronger and better.”

[00:24:48] Dan: “The industry and various aspects of it need some transformation. And I'm not just talking about ICE to electric; it needs some transformation in how we do business and interpersonal relationships, more positivity to the approach, and more collaboration.”

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