Financial trouble affects local car suppliers

May 28, 2009 10:00:14 AM PDT
GM's financial problems and Chrysler's bankruptcy are having a big effect on other businesses that support the auto industry.It isn't just about the dealerships. It's also about distributors and those who supply auto parts to the dealership and others for GM cars.

GM dealerships like Ray Buick say for now they're OK, they have plenty of parts and are able to service their customers as they come in, but they expect that that may change because of GM's financial situation.

Although GM's parts division, A.C. Delco, which the automaker first tried to sell and has taken off the market, remains strong. Auto parts suppliers are worried about the manufacturer's ability to provide parts.

"Well, a manufacturer that manufacturers the parts for General Motors, or Chrysler or Ford, if they're not shipping the part to Ford or G.M, or to Chrysler, in turn they can't redistribute the part to us," said Anthony Martino, ASM Auto Supply. "We sell them again. We sell the product to the customer or the consumer. So unless they can get their finances in order and they pay their suppliers, we're not getting the parts. It's a problem. I think it's just the tip of the iceberg, unfortunately."

And many are concerned and believe the same thing simply because of the way the industry trend seems to be going. On Thursday, an auto parts manufacturer that provided parts primarily for Ford dealerships and cars filed for bankruptcy.

Martino says that this can illustrate the trickle-down effect of the economy. In essence, when the manufacturers are considering problems, it goes to the dealerships as well as the auto suppliers and their parts.


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