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Area Development - Site Selection, Facility Planning and Workforce Development

Study: One-Third of Auto Suppliers Face Bankruptcy Risk

08/08/2008
Lower industry volumes and the heavy decline in truck and SUV sales are putting as many as one-third of North American automotive suppliers at risk of bankruptcy, according to a study by Grant Thornton. The Summer 2008 Automotive Industry Review says that at-risk suppliers include those heavily reliant on large SUV and truck volumes; those that are located only in North America; those that have concentrated on domestic original equipment manufacturers' (OEM) sales; and those that have been exposed to increases I raw materials costs without passing those costs on to the consumer. "It's not just the suppliers producing lift gates, transfer cases, and other truck-only parts that are at risk," says Kimberly Rodriguez of Grant Thornton's Advisory Services Automotive Platform, "but also all those relying on truck volumes for survival, including companies producing chassis systems, NVH systems, driveline and drivetrain components, stampings, and a host of others." The study also suggests that the risk of bankruptcy for the OEMs - including General Motors, Ford, and Chrysler - is low.