Sunday, June 21st, 2009
As far as the GM bankruptcy issue goes, the number of suppliers affected by the impending closure is countless. However, as a business, that is not all that General Motors has to worry about. Remember that for any corporation or business, debts go far beyond auto suppliers. Some may not even be aligned with the auto manufacturing binge something which was revealed as far as the growing concern on the GM row.
GM has over $100 million in debts, a large chunk of which is from the advertising sector. Date back and you will notice the aggressive nature of advertising and promotional practice that popular businesses undertake and General Motors is among that niche.
Among the company’s top 50 creditors, 10 are outside the auto or transportation industries. GM owes these firms just under $250 million. But they have to take a back seat in the bankruptcy process.
Given that figure alone, you can imagine why the GM bankruptcy filing is taking quite a beating. A lot of businesses stand to lose a lot from the GM mess. And mind you, not all of them are from car parts sector.
(Source) CNN
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Posted in Business, GM | Comments
Saturday, May 16th, 2009
Much of the attention for the last couple of days was on the impending cut on dealerships by Chrysler and General Motors. Now it is time for the auto suppliers and support companies to feel the crunch. And one of the companies that have announced their cost-cutting measures is a familiar brand in Bosch, maker of Chassis Systems.
The whole car industry debacle is following a domino effect. The fall of the top tile means that others relying on it will follow. And Bosch is a big supplier that can certainly tilt the whole automotive scenario for the worse as it announces job cuts of about 50 workers.
The eliminated positions are in the company’s facilities at Bosch Chassis Systems and Full Brake in South Bend and Automotive Proving Grounds in New Carlisle. The cuts are expected to be effective today.
Though declared to be only 20% in the reduction of employees, don’t expect it to be the last. Unless the economy picks up, expect more drastic measures by companies like Bosch to be applied.
(Source) Fox 28
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Posted in Business, Cars, Industry | Comments
Sunday, May 3rd, 2009
If you think Chrysler’s declaration of bankruptcy is one setback, wait until it amplifies on the affiliated suppliers. Apparently, the auto suppliers will also have some problems coming their way, potentially losing one of their biggest clients for some time now.
Problems with suppliers could also impact production at the US plants of other major automakers such as Ford, Toyota and Honda which have been working with months to ensure to stability of their supply.
Under a plan announced Thursday by President Barack Obama, Chrysler aims for a “surgical” bankruptcy to wipe out a portion of its debts, allowing the creation of a new firm tied to Fiat to put the Detroit firm on the road to profitability.
Chrysler said it will idle most plants during the bankruptcy process, which it anticipates will take 30 to 60 days. But analysts warn the process could take significantly longer.
And suppliers were already smarting from news that General Motors — which has until June 1 to present a viability plan to the US Treasury — plans to shut most of its assembly plants during May, June and July to help control inventory and avoid difficulties with parts shortages.
US auto sales, which collapsed last fall amid a deepening economic crisis, were down 34 percent in April and are not expected to improve for months.
(Source) ABS CBN
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Posted in Business, Cars, Chrysler, Industry | Comments
Friday, March 13th, 2009
If you think the economic bug that is hitting the auto industry bigwigs is a cause for alarm, hold on a bit. Auto suppliers may likewise find themselves on the same vote as slashes in car parts and supplies will also mean faltering sales and numbers for these said suppliers.
Marcero, part of the firm’s Corporate Advisory and Restructuring Services team based in Southfield, Mich., believes some 500 Tier-One suppliers may be at high risk due to the cascading effect of reduced volumes and uncertainty around government support in the near term. But damage can be mitigated if key suppliers form a coalition with automakers, banks and the government to drive an orderly consolidation of the supply base.
“Suppliers struggled to make money when industry volumes were almost double what they are today, and consolidation has been happening mostly among smaller companies at the lower tiers,” Marcero said. “Now, we are near a tipping point where the scale and scope of supplier failures at all levels will increase dramatically.
“To right-size capacity levels and promote a viable industry, we believe 30 to 40 percent of all suppliers are at risk due to the necessary alignment of capacity with demand, which should stabilize in the 12 to 14 million-unit range by 2010-2011,” she added. “But if the scenario plays out in an uncontrolled fashion, every automaker will almost certainly lose production and incur steep financial losses. Without a structured approach of consolidation to the benefit of the entire supply chain, the industry may lose critical partners with the technology, scale and geographic footprint that are linchpins in the viability equation.
“Suppliers need to proactively determine whether they are a consolidator or a consolidatee,” she said. “For those that are best suited to operate as consolidators, they need to step forth and provide solutions.”
(Source) Press
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Posted in Business, Cars | Comments
Sunday, February 1st, 2009
Drivetrain parts supplier American Axle & Manufacturing Holdings Inc. recently reported a larger than expected quarterly loss due to falling production volumes by major automakers. Shares of the huge parts supplier fell 22 percent in a single day. The net loss came to $112.1 million for the fourth quarter alone, compared with a year-earlier loss of $26.8 million, the company said. Sales of American Axle parts fell 33 percent to $503.0 million.
American Axle has been aggressively laying off and terminating employees over the course of 2008, contributing to a downward economic spiral as consumers pull back on spending due to job loss which then creates more cut-backs in production and more job loss. “There are too many material uncertainties surrounding the economy and our industry,” Chief Financial officer Mike Simonte told analysts and reporters on a conference call.”We don’t know what is going to happen, we are not going to speculate on the outcomes, what we can say is we understand the risks we face,” Simonte said.
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Posted in Business | Comments
As far as the GM bankruptcy issue goes, the number of suppliers affected by the impending closure is countless. However, as a business, that is not all that General Motors has to worry about. Remember that for any corporation or business, debts go far beyond auto suppliers. Some may not even be aligned with the auto manufacturing binge something which was revealed as far as the growing concern on the GM row.