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Auto Suppliers Panic as Detroit Collapse Nears
Owed billions by GM and Chrysler, many near failure
By Rob Quinn
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Posted Dec 12, 08 5:30 AM CST
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(Newser)
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The looming collapse of GM and Chrysler is sending shudders all the way down the supply chain, the New York Times reports. America's auto parts suppliers employ 600,000 people—more than twice as many as the Big Three automakers combined—but many suppliers are already stretched to the limit and will rapidly disappear if GM and Chrysler can't pay their bills.
If the suppliers go under, the effects would rapidly hit every auto plant in the US. Ford warns that the collapse of one of its rivals would affect its production within hours, but the credit squeeze means that suppliers can't carry cash-strapped Detroit any further. “In a normal recession, we could have gone to the capital markets, but the capital markets are closed to us,” said one major supply chief.