Following President Obama’s auto task force’s decision to deny U.S. auto suppliers up to $10 billion in federal aid, Ford CEO Alan Mulally has spoken out on behalf of the nation’s supplier base. Mulally said the health of U.S. suppliers should now be the industry’s top concern.
Mulally acknowledge some suppliers might go out of business, but emphasized the need for a strong U.S. supplier base. “The most important thing that we do now is help them consolidate because we have this overcapacity,” Mulally told Automotive News.
“Everybody is going to be really careful that we do that and that we don’t topple the supply base.”
Mulally added that Ford is working with a number of other automakers to ensure the nation’s supplier base doesn’t end up on a slippery slope. Part suppliers have been hit hard by the collapse in new car sales, with bankruptcies at Chrysler and General Motors only worsening the situation. Some suppliers fear they won’t have enough cash on hand to ramp up production once Chrysler and GM fully emerge from their Chapter 11 filings.
06/17, 6:30 PM
posted by:
Turbo Mo
Typical Obama administration behavior. Dump all the people’s money into bankrupt companies, and let the critical auto suppliers fail with no aid. Don’t they realize that this hurts everyone??
06/17, 8:14 PM
posted by:
mayer_ray_nagin
Most suppliers are non union and therefore they contribute relatively little to the democrats. That’s what it is about.
06/17, 8:21 PM
posted by:
Borat
If Ford (GM & Chrysler) would pay on time for the goods they received, suppliers would be in excellent shape. Their product sold on retail market is extremely profitable. It is the wholesale side (which accounts for 90%) that is money loosing proposition.
06/17, 8:55 PM
posted by:
KarLoveBoy88
Turbo Mo and Borat, you both are right. Yes were hurting with funding the ailing car companies and the Big 3 should pay their suppliers on time. But what everyone is forgetting is that the bailouts were for the companies to stay afloat and pay their suppliers off. But what they lost sight and bought new, “updated” versions of their current private jets to all fly to the same spot in Washington to lure more money. Now that these companies new infrastructure going into effect, we should see some positive outcome and surviving suppliers.
06/17, 9:56 PM
posted by:
johnnycanuck
Just keep those Mustang suppliers happy. We need our fix of ‘Stang baby! Need it bad!
06/17, 10:19 PM
posted by:
leftwingagenda
typical obama administration behavior? your characterization of what’s happening is completely wrong…if you’re going to attack obama, at least do it with facts…there was a post just yesterday about gm giving 250 million to delphi, where did that 250 mil come from? oh yeah, the bailout! the suppliers aren’t going to fail with no aid, you are just flat out wrong…
there will be a contraction of suppliers, though, because if you haven’t noticed, the market for cars as shrunk and the reduction in suppliers is inevitable…you can’t produce parts at the same rate yet sell millions fewer cars per year…
all i ask of you obama bashers is to make sense, please try harder…
06/18, 7:06 AM
posted by:
carstuff
??? come on guys what misinformation:
Suppliers are 90% wholesale? Borat most of the automotive suppliers that are going under do not have any wholesale business or perhaps I do not get what you mean by wholesale. Warranty parts are probably more profitable but not much and there is not that much business there anymore. The aftermarket chinese companies take care of the bulk of that. Sure there are a lot of tier 1’s like Delphi/Visteon/JCI for one of a kind parts like interior trim plates but the suppliers that are going under are smaller like Metaldyne.
http://www.metaldyne.com/metaldyne/
Also if the OEM’s paid their bills on time would help but when all OEM’s are shutting plants down for weeks/months at a time and sales are down 40-50% few suppliers competing at cut rate pricing with China are not going to make it w/o some cash.
06/18, 7:29 AM
posted by:
carstuff
One item not mentioned is that the OEM’s pay their Tier 1’s and the tier 1’s pay their Tier 2’s and right on down the line. With the Tier 1’s close to bankruptcy THEY may be the ones not passing the money from the OEMs down.
06/18, 1:43 PM
posted by:
spg900
Turbo Mo – correct me if I’m wrong but didn’t the Bush admin start handing out the people’s money. The Obama admin could have chosen to stop it (and be crucified by half the population for allowing jobs to be lost ) or continue the bailouts. You guessed it, the other half of the population (which includes you ) is now crucifying him. Please feel free to outline your recovery plan !