With reports that GM is just days away from a bankruptcy filing, auto suppliers are wondering what will happen. Visteon already filed for Chapter 11 bankruptcy protection on Thursday and now the Detroit News is reporting that many other suppliers are anxiously wondering what will be the future. Apparently as many as 1400 auto suppliers to GM are expected to receive approximately $2 billion in payments from the automaker today. The payments are for goods delivered during the month of April. What is not known is when the suppliers will receive their next payment given GM’s production shutdowns and inevitable bankruptcy filing. The suppliers to both GM and Chrysler are barely keeping themselves afloat and are looking at the months ahead where plants will be idled and receivables down. Unfortunately, without functioning suppliers who are able to pay their employees and operate plants, GM and Chrysler plants cannot produce vehicles. Not only does the supplier uncertainty affect GM and Chrysler but Ford as well who depends on some of the same suppliers for parts and materials.

Jeffrey Herrick