The Real Crisis In The Auto Industry

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Remember when the country was fixated on whether or not Uncle Sam should bailout GM [GM 2.76 0.04 (+1.47%) ] and Chrysler? Remember how there was compelling evidence that allowing those auto makers to collapse could bring down the entire auto industry? Remember how it felt as if the Big 3 CEOs appearance on Capitol Hill was the climax of the liquidity crisis for the auto industry?

Forget all of that.

The real crisis brewing in the industry swirls around the auto parts suppliers.

No wonder the suppliers are now talking with the Treasury Department about getting $20.5 Billion in federal aid. These guys are hurting, close to collapsing, and on the verge of blowing a hole through the auto industry. Sound serious? You bet. In fact, if you ask most people in the auto business what scares them the most right now, and they'll tell you it's the chance of cascading bankruptcies among auto parts suppliers.

Read the full article at CNBC online

Date published: Feb 05, 2009

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