Skip to content

Clark Hill 2022 Automotive & Manufacturing Industry Outlook: Supply Chain

March 29, 2022

All signs indicate the automotive and manufacturing industry will continue to face supply chain challenges in 2022 and beyond. Each challenge alone and in the aggregate has been exacerbated by several factors, including the prolonged pandemic, the lean-style production system long in place, the sluggish adoption of diversity, and historically slow investment in technology. For the most part, there are no short-term solutions and many of the efforts to address this new normal will require collaboration between OEMs, suppliers, unions, state and federal governments, countries, and the like. Fortunately, there is a sufficient supply of optimism in the industry and hopefully a continued strong economy to aid these efforts. 

While much is not in the immediate control of any one supplier, like immigration policy or the shrinking population of workers, there are measures suppliers can take to ensure greater resiliency in their own supply chain. One example that’s within the means of many suppliers would be investing in technology and software to assist with the purchase, transportation, warehousing, and inventory of raw materials and parts. It’s likely some customers are already requiring this investment by their suppliers in updated terms and conditions that govern supply chain relationships. Dual sourcing is another measure for suppliers particularly when the purchase of raw materials or parts are from global regions that are subject to logistical, geo-political or climate-based challenges. Thorough due diligence by suppliers of their sub-suppliers and vendors provides yet another opportunity to build resilience into operations. Further, revisiting and improving contractual terms that govern a suppliers’ relationships with its supply base is critical. Indeed, many suppliers are still using form agreements, standards, policies, guidelines, and terms and conditions that are extremely outdated and fail to provide any level of protection for the disruption and challenges that exist today.  Taking the time to update these important documents will help ensure more predictability and resiliency in day-to-day operations. Of course, with labor and talent shortages, suppliers should be creative in the way they treat and attract people, such as building an inclusive people-first culture for factory jobs and developing career paths to attract a newer generation of diverse workers. Otherwise, it will prove difficult to compete by solely paying signing bonuses or offering higher compensation when the competition is doing the same.    

If suppliers focus on the items they can control, there are many opportunities to improve performance despite the challenges faced by the industry. We will be addressing these opportunities, including the ones above, in more detail in articles, panel discussions, podcasts, and webinars throughout 2022. If you would like more information or assistance with any of these opportunities, please contact us. 

Subscribe for the latest

Subscribe

Related

Event

2025 California Labor and Employment Law Symposium

Join Clark Hill for a full-day symposium exploring the most pressing legal issues facing California employers today. Our California Labor & Employment attorneys, along with colleagues from our Immigration and Cybersecurity/Data Privacy groups, will provide practical insights, legal updates, and strategic guidance across a range of workplace topics. Whether your role is in-house counsel, HR leadership, or company executive, this event is designed to equip you with the tools to help navigate California’s ever-evolving employment landscape.

Explore more
Event

Webinar: End of Year Privacy Check-In: What’s Changed, What Hasn’t and What’s Happening in 2026

Attendees will gain insights specific insight into the definition of ADMT under the new rules, common in-scope use cases and requirements, risk assessment and cybersecurity audit obligations and expectations for regulatory focus in 2026. You’ll walk away with a “check-list” of compliance priorities for 2026.

The session will provide practical guidance for legal, compliance, and business teams preparing for compliance deadlines and navigating emerging privacy risks.

Explore more
Event

2025 Illinois Labor & Employment Law Symposium

Join us for a complimentary half-day seminar designed for legal, HR, and business professionals navigating today’s rapidly changing work environment. Our experienced attorneys will share timely insights, practical strategies, and legal updates to help you stay compliant, mitigate risk, and lead with confidence.

Explore more