Posted on 01/09/2006 10:49:13 AM PST by Last Dakotan
Detroit - About one-third of the automotive parts industry is probably headed for bankruptcy.
The chilling prediction comes from Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Mich. He spoke at a conference for automotive writers Saturday, a week before the North American International Auto Show opens to the public Jan. 14 at Detroit's Cobo Conference and Exhibition Center.
Faced with financial hemorrhaging, automakers are paring down their number of suppliers and are working closer with the remaining companies to get a better handle on costs.
Those suppliers in top market positions can invest in next-generation technologies and strategies, solidifying their leadership positions. The rest of the pack finds itself in a race to the bottom, engaging in aggressive cost-reduction programs against lower sales.
"The possibility is that 30 to 35 percent of the independent, U.S.-owned parts firms already are at the brink of insolvency and will probably have to use Chapter 11 bankruptcy," McAlinden said. That's hundreds of financially troubled companies, including ones that feed large suppliers such as Delphi Corp. and Visteon Corp.
(Excerpt) Read more at jsonline.com ...
You are just full of good news today from an owner of one of those businesses.
Kind of picked the wrong day for this. No one cares. The DOW is over 11,000 for the 1st time since 1999. Uemployment is under 5% for the 1st time since 2000.
With respect Johnnie, as a worker in that industry, I care.
Michigans economy is in the s***house. There are many tier I/II supplers that are under chapter 11.
That's why I'm a temp working for less and weird hours.
Opps. Sorry!
I know it wasn't personal. Just wish I worked in a different industry.
I'm a Tier One supplier employee and we've been expecting this for years. We're about $1.5 billion in annual sales and $450 million comes from supplying to GM. We've extracted about every bit of cost that we can and evern plants in Mexico and Korea aren't keeping the costs low enough. China will implement this year and we'll see how it goes.
If I owned a manufacturing business and GM came calling, I'm not sure I'd open the door.
I know exactly how you feel. I have worked for four different suppliers since 1997 and am unemployed again. Every time it takes longer to find a new job, and each one pays less than the one before. Probably time to leave, but I'm sick and tired of moving all the time.
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