Monday, November 09, 2009

Tier 1 Auto Suppliers are doing o.k. enough

Lear is coming out of bankruptcy, rather quickly, as are a lot of other supplies. The link has some good stats about the health of the auto supply industry in general. Very few Chapter 7 filings (going out of business) and lots of Chapter 11 filings (reorganization of debt). There is still plenty of pain and job losses, but it could be worse for an industry totally ignored by a government that was willing to do anything to keep the Big 3 going, a government totally unaware that the manufacturers do high level assembly of systems and subsystems built by others. I expected worse.

Maybe they were hoping for a trickle down effect - the opposite of what they were hoping in the housing market with a "first time buyer" tax credit, which now has been broadened to anyone moving up in the market. Not enough trickle, I guess, and certainly car sales have slumped since the cash-for clunkers program expired.

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