Comments on: GM and Ford Face EU Suppliers’ “Run on the Bank”

By: charly

charly — Sat, 15 Nov 2008 00:45:44 +0000

Big difference between GM/Ford in America and Europe is marketsize. In America they are still so big that for most suppliers the choice is between supply them and hoping that they will pay or not supplying them and closing shop. So in reality most suppliers don’t have a choice. In Europe they are not that dominant so for many suppliers the loss of GM or Ford would mean a significant lose of turnover, say 15%, but it wouldn’t lead to closing the factory

Menno, Vauxell/Opel/Saab will be lifted out of General Motors if GM goes bankrupt (it doesn’t matter if it is Ch7 or Ch11). The same is true of Chevrolet Asia (née Daewoo) And Buick. That is why the people who are for Ch11 are so completely wrong.

By: highrpm

highrpm — Fri, 14 Nov 2008 14:39:40 +0000

One key note from the linked article, but omitted from this editorial, is that most US suppliers already trade uninsured.

By: menno

menno — Fri, 14 Nov 2008 13:14:47 +0000

Aren’t the German auto workers all planning on going on strike, anyway?

Of course, if GM and Ford go down worldwide (which I’d give 75/25 and 50/50 chances of respectively), then these workers won’t have any jobs to go back off strike and work at, will they?

Not to mention the supplier companies having the rug pulled by these three credit insurers.

Certainly the supply of Audis, Mercedes, BMWs, Saturn Astras and Volkswagen Passats and Eons will pretty much dry up within a matter of weeks to months at the US dealers.

Interestingly enough, I’d have to also guess that VW Mexico production could end up ceasing (or at least certain options could end up being temporarily discontinued at the least) – how much of VW’s Rabbit and Jetta (built in Mexico) is sourced from German suppliers? Any more than 0% and you might see a problem!

Same thing applies for US assembled German makes; BMW, Mercedes.

The wisdom of the Japanese and South Koreans having close supplier ties may help them in this scenario, vs. the companies which seem to alternately send work to the cheapest possible suppliers and also ironically seem to use suppliers from their “home country” no matter the cost, for other components. Double jeopardy?

By: Bertel Schmitt

Bertel Schmitt — Fri, 14 Nov 2008 10:40:11 +0000

I’m just coming back from a big parts trade show in Beijing. This story, along with last night’s downgrade of most American parts suppliers, is the talk of the show. My contacts in the parts supply industry report that business with the US, especially in OEM sales is “near dead.” Trade with Japan and Europe still reported to be “ok.”

By: John Horner

John Horner — Fri, 14 Nov 2008 03:31:39 +0000

I suspect that most suppliers will trade uninsured. That is, after all, how it was done for decades. The financial industry has managed to get itself into every transaction and every corner of life.

Suppliers would be killing themselves if they suddenly refused to take business from Opel and Ford.

By: guyincognito

guyincognito — Fri, 14 Nov 2008 02:15:32 +0000

Yeah right. If these suppliers are so dependent on insurance to protect them from a default they are in too deep to call shots. They know damned well the big 3 aint paying up front.

By: speedlaw

speedlaw — Thu, 13 Nov 2008 23:20:06 +0000

The Factors always know first…just ask the fashion industry.