The domino effect begins: As a result, the hypotheticals about the domino effect of the companies’ troubles through the vast network of auto suppli
December 12, 2008

The domino effect begins:

As a result, the hypotheticals about the domino effect of the companies’ troubles through the vast network of auto supplier firms — which employ more than twice as many workers as the carmakers — are becoming real.

General Motors and Chrysler, for example, owe their suppliers a total of roughly $10 billion for parts that have been delivered. G.M. has held off paying them for weeks, and Chrysler is paying in small increments. But the cash shortages at G.M. and Chrysler are getting more severe, according to their top executives and other officials.

“I don’t think that suppliers will be able to get through the month without continued payments on their receivables,” said Neil De Koker, chief executive of the Original Equipment Suppliers Association in Troy, Mich., a trade group.

When suppliers big and small start failing, the flow of parts to every automaker in the country will be disrupted because as suppliers typically sell their products to both American and foreign brands with plants in the United States.

As Marcy writes:

Republicans Ask Workers to Give, but Not Small Businessmen or Bond-Holders

The Replicants of the South only ask that the unions be destroyed... Wait until Shelby's pals don't get their parts either.

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