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CSM - Supply Base and Every Automaker Threatened by a Detroit 3 Bankruptcy
An analysis by market forecasting company CSM Worldwide shows that the every North American automaker as well as the entire automotive supply base would feel an immediate impact if any of the Detroit 3 would file for bankruptcy.
Dealers need to know about The Engine of Democracy
Here at Auto Credit Express, we are well aware of the immediate consequences of the failure or bankruptcy filing of any of the Detroit 3 automakers. Detroit, after all, is our home.
As retail automotive dealers, you should also be aware of The Engine of Democracy web site that was created by a coalition of organizations that represent suppliers and dealers in all states. According to auto dealer Carl Galeana, “This is about line workers, parts suppliers, dealership mechanics, and hard working moms and dads earning a living for their families. As Americans, we depend on the auto industry to drive our economy in these very tough times. The role it played in reinvigorating our economy after 9/11 is just one example. And please, let’s not forget how this industry turned on a dime and became what President Roosevelt called ‘The Arsenal of Democracy’ during World War II.”
The web site can be found at www.theengineofdemocracy.com and it contains information on how dealers and anyone wishing to support the loan initiative in Congress can write to their representatives as well as spread the word. Here is a press release that you can link to from the site:
CSM Analysis:
Northville, Mich., Dec. 3, 2008 – A bankruptcy filing by General Motors, Chrysler or Ford would have an immediate impact on the financial health and stability of suppliers and every automaker operating in North America, including the Asian and European manufacturers, because they are mutually dependent on the same supply base, according to research conducted by CSM Worldwide, the global leader in automotive forecasting and advisory services.
“A bankruptcy filing by a major automaker would be catastrophic,” said Craig Cather, CSM’s president and CEO. “Many suppliers can’t afford another major hit to their production and cash flow. If they are forced to reorganize or possibly even liquidate, that would start a ripple effect that would undermine the health and stability of every automaker in North America.”
For example, CSM’s analysis showed that 58 percent of GM’s North American suppliers also supply Asian automakers. Among Chrysler suppliers, 59 percent also supply Asian automakers. Among Ford suppliers, the figure is 65 percent.
“The bankruptcy of a major automaker won’t be just a Detroit problem or a Michigan problem,” said Cather. “The pain will quickly spread to the Southern states that have new foreign-owned auto plants, as well as Canada and Mexico, because there are no quick and easy ways to restructure companies or resource components when the entire industry is in crisis.”
CSM’s research was prepared for the Original Equipment Suppliers Association (OESA) and theEngineofDemocracy.com to factually portray the interconnectedness of all North American automotive manufacturers to a shared supply base. It is based on the CSM Worldwide Supply Chain & Technology Forecast research of more than 15,000 component supply contracts across 64 supplied vehicle components/systems for all light vehicle produced in North America.
The Bottom Line
According to the web site, “The Engine of Democracy coalition includes automotive supplier and dealership employees, affiliated organizations and individual men and women who are concerned about the future of the domestic auto industry and what it means for America’s economy and security. We are self-funded and receive no funds from Chrysler, Ford or General Motors.”
Be sure to make your employees, families and friends aware of this site. All our futures may very well depend on what happens in Washington in the next few weeks.