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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The biggest problem is, no one wants to hear about the problems, we only want to hear good things. No candidate would ever win if he said "I'm going to tax the shiat out of everyone so we can crawl out of the hole we dug ourselves into" even if that is what we need. No politician is going to cut spending, especially for pet projects and pork. It's too bad Ron Paul is labeled crazy, because he's the only one who wouldn't have spent us under the table. I don't really know Obama's take on economic plans, but McCain sure loves the big business, as does HillDog. We are SOL and there isn't much we can do. The one thing holding the economy up right now is the fact that many countries economies are closely tied into ours. If we fall so do they. That won't be the case forever though if the bad news keeps coming. I think the loss of value of the dollar will help to bring jobs back in though. As the dollar goes down, the cost to outsource jobs becomes higher. It's too late to prevent a recession though. It's coming and people are going to have to learn to live without the luxuries they thought they were entitled to with their credit cards. And so castles made of sand fall in the sea, eventually - Jimi Hendrix
Meh. We have all the food and all the guns. If things ever got that bad we'll just take what we need when we need it. I may be overly cynical, but I'm not too worried about long-term economic health until we run out of guns and food.
I guess I just don't think that manufacturing is as important as intellectual property. That's the main reason I'm not too keen on the increasing pivotal rold Communist China is playing in the market, especially in the car sector. They obviously don't care about all the copyright infringement lawsuits that have been filed, and don't plan to do anything about it. Still, it makes no sense being good at making things if there's no idea of what to make...or marketing effort to get it sold...or person to actually sell it. Manufacturing is but a part of the process, and glorifying it is just holding on to the past, which is never a good thing.
The longer you avoid the surgeon , the deeper his knife will cut.