Comments on: Chrysler Can’t Make Cars Yet, Needs to Secure Access to Tools http://www.nakedcapitalism.com/2009/06/chrysler-cant-make-cars-yet-needs-to.html Mon, 23 Nov 2009 06:07:28 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Ryan http://www.nakedcapitalism.com/2009/06/chrysler-cant-make-cars-yet-needs-to.html#comment-49383 Ryan Wed, 24 Jun 2009 12:48:27 +0000 http://www.nakedcapitalism.com/2009/06/chrysler-cant-make-cars-yet-needs-to-secure-access-to-tools/#comment-49383 I work for a big Chrysler supplier. I won't say much, but the story's spot on.<br /><br />Rick, with all due respect, you're clueless on the situation. A few suppliers have some power, my company got a seat on the new board alongside FIAT, the UAW, and the U.S. and Canadian governments, but most have little say and are in such a bad business situation themselves that they'll be forced to take whatever they're given. Suppliers are going down left and right right now and that's causing major problems for all automakers, not just GM and Chrysler. I work for a big Chrysler supplier. I won't say much, but the story's spot on.

Rick, with all due respect, you're clueless on the situation. A few suppliers have some power, my company got a seat on the new board alongside FIAT, the UAW, and the U.S. and Canadian governments, but most have little say and are in such a bad business situation themselves that they'll be forced to take whatever they're given. Suppliers are going down left and right right now and that's causing major problems for all automakers, not just GM and Chrysler.

]]> By: Rick http://www.nakedcapitalism.com/2009/06/chrysler-cant-make-cars-yet-needs-to.html#comment-49372 Rick Wed, 24 Jun 2009 01:32:19 +0000 http://www.nakedcapitalism.com/2009/06/chrysler-cant-make-cars-yet-needs-to-secure-access-to-tools/#comment-49372 The big three aren't the huge vertically integrated (self contained) monsters that they used to be. Now that they've outsourced most parts production, they're more like final assemblers. Any one of those suppliers has an effective veto power on the restart if they think they're going to get screwed. The thing is that even if they wanted to take a beating, they couldn't financially. <br /><br />It's become common now for big companies to string vendors out to as far as net 120! When your key suppliers are that dependent on huge amounts of nearly free credit, market tightness alone can kill them. Neglect and abuse guarantees it. I predict that all three BK's (Ford will go down on 12-24 months) stall simply because their supply chains will have evaporated by the time the get around to needing them again. The big three aren't the huge vertically integrated (self contained) monsters that they used to be. Now that they've outsourced most parts production, they're more like final assemblers. Any one of those suppliers has an effective veto power on the restart if they think they're going to get screwed. The thing is that even if they wanted to take a beating, they couldn't financially.

It's become common now for big companies to string vendors out to as far as net 120! When your key suppliers are that dependent on huge amounts of nearly free credit, market tightness alone can kill them. Neglect and abuse guarantees it. I predict that all three BK's (Ford will go down on 12-24 months) stall simply because their supply chains will have evaporated by the time the get around to needing them again.

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