USA Today: More Supplier Bankruptcies to Follow
The situation has gotten so bad for parts suppliers, that even USA Today has an article describing the industry's abysmal conditions. After chronicling the travails of supplier bankruptcy poster child Plastech, the story notes that times will be tough for everyone in the biz. "I can't in my 21-year history in the auto industry think of a time when it's been more difficult than this," wails Laurie Harbour-Felax of consulting firm Stout Risius Ross. "More Chapter 11 filings are imminent in the next three to six months." The wide load of industry pressures: weak demand, rising commodity prices, increased overseas competition, tightened credit and cost-cutting pressure. Craig Fitzgerald, a partner at Plante & Moran, predicts that 50 percent of small and midsize suppliers will go out of business in the next five years, either selling out or shutting down. This is gonna get rough. I mean, rougher.
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