GM strike costs Strattec $7 million in second quarter

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The nearly six-week strike at General Motors by UAW workers last fall cost Milwaukee-based Strattec Security Corp. around $7 million in sales during the company’s second quarter.

Strattec previously reported the strike cost it $3 million in sales during the first quarter, bringing the total cost to $10 million.

“We avoided layoffs by continuing to build and balance inventory, minimizing overtime, allowing employees to voluntarily take unpaid time off, and using time to focus on process improvements and training,” Frank Krejci, president and chief executive officer of Strattec, said in a BizTimes business lessons learned in 2019 feature in December. “While it hurt our short term sales, we are a better company after the experience.”

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Strattec’s overall sales decreased 5.9% in the second quarter to $106.3 million and 1.7% for the first six months of the fiscal year to $226.2 million. Net income, however, improved from a $22.2 million loss to a $1.3 million loss.

“Despite the weaker sales for the current year quarter, we were still able to reduce the borrowings under our debt facilities by $4 million during the quarter and a total of $10 million for the first six months of the current fiscal year due to our strong cash flow from operations,” Krejci said in a press release announcing company earnings. “The sales outlook for Strattec during the remainder of our fiscal 2020 is anticipated to be stronger than the first six months of fiscal 2020 assuming a stable U.S. economy and a consistent mix of vehicles.”

Despite the strike, sales to GM were up in the quarter from $23.8 million in 2018 to $25.4 million last year. Sales to Fiat Chrysler also increased from $25.7 million to $27.2 million. The company attributed both increases to higher product content for vehicles Strattec supplies components for.

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Sales to Ford, on the other hand, decreased from $16.1 million to $15.3 million because of lower volumes for F-series pickup trucks.

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