Bailout Would Help German Giants, Too

Detroit bankruptcies would ripple through entire industry's supply chain
By Ambreen Ali,  Newser User
Posted Dec 10, 2008 2:20 PM CST
A Mercedes-Benz employee checks a car at a factory in Germany.   (AP Photo/Thomas Kienzle)
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(Newser) – German giants BMW and Daimler are rooting for a bailout of the Big Three, since a bankrupt Detroit would devastate sales and cripple parts-makers they all share, Bloomberg reports. The US is the top market for BMW, No. 2 for Daimler’s Mercedes-Benz. Meanwhile, Fiat, Peugeot, and Renault—which compete with GM and Ford in Europe—worry the bailout will unfairly sway competition.

Purchased parts account for 75% of a car’s value, so a hit to component makers would resonate throughout the industry. “You can’t underestimate what would happen when a large player collapses,” BMW’s CEO says. Its stock went up today, as did Daimler’s, partially from optimistic news of the American bailout. An association of European automakers is asking for $52 billion of low-interest loans and incentives from the EU.