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.
| Also supply to: | |||||
| OEM Supply Base for NA Vehicles |
Chrysler | Ford | GM | Asian OEMs | European OEMs |
| GM | 56% | 51% | 100% | 58% | 37% |
| Ford | 64% | 100% | 70% | 65% | 46% |
| Chrysler | 100% | 54% | 66% | 59% | 44% |
"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.
CSM Worldwide (www.csmauto.com) provides trusted automotive market forecasting services and strategic advisory solutions to the world’s top automotive manufacturers, suppliers and financial organizations. CSM Worldwide covers the global automotive environment from offices in Detroit, Grand Rapids, Frankfurt, London, Paris, Shanghai, Tokyo, São Paulo, Budapest, Delhi, Bangkok and Seoul.
