Auto suppliers concerned about Washington talks
MID-MICHIGAN (WJRT) -- (11/19/08)--Mid-Michigan's auto suppliers watching Washington. Hundreds of local companies do business with Detroit's Big Three.
For some, General Motors Corp. is their biggest customer. Not surprisingly, suppliers strongly support what they call a loan -- not a bailout -- to the Big Three.
After all, their livelihood is at stake. The Center for Automotive Research in Ann Arbor estimates that auto suppliers employ almost 120,000 Michigan workers.
Nationwide, that number tops 500,000. It's nearly double the total workforce of GM, Ford Motor Co. and Chrysler LLC combined.
These are the companies that manufacture parts, plastic molds and even boxes for the automakers. Around the country, the credit crisis has hit them hard.
Analysts say their sales have dropped, too. Plus, no banks seem to want to lend anymore -- especially to companies so dependent on the troubled auto industry.
Steve Landaal runs a packaging supplier in Burton. He says his company is doing all right for now, but GM makes up 53 percent of his business.
"I think that everyone's very concerned about what we're watching in Washington this week," he said.
"I think it affects the lives of not only everyone here in the Midwest, but everybody around the country and the world.
"If the auto industry were to fail and go under, I feel like the ripple effect would be more like a tsunami."
"Their dealers are in every Main Street in America and their suppliers exist in most of our states," said Sen. Carl Levin.
As the politicians argue on Capitol Hill, Lapeer's Mold Masters CEO Mitch Monczka is left to wonder: What if his biggest customer, GM, went under?
"Strategically, we have some things we could do short term. Long term, we'd be devastated," he said.
Mold Masters produces automotive interior components, such as glove boxes for GM trucks. He employs about 300 workers.
"It surprises me people who are supposedly the leaders of the country are so obtuse about a serious issue like this," Monczka said.
In Flint, GM Security Packaging employs 200 workers.
"I'd hate to think what would happen if GM went under. I'd like to think that would never happen," said Security Packaging's Andy Goggins.
But as the Big Three fight for their survival, these three companies are fighting for theirs. And Landaal is waiting to see what happens to his biggest customer.
"We are playing out those scenarios right now as far as cash flow and availability with our lenders to ensure to survive that, but quite frankly, I don't know that we could," he said.
Some analysts warn a loan to the Big Three would still leave problems for the auto suppliers. After all, credit is still tight.
Comment on this story below and we may read what you have to say on the air.
Source:http://abclocal.go.com/wjrt/story?section=news/local&id=6514656
For some, General Motors Corp. is their biggest customer. Not surprisingly, suppliers strongly support what they call a loan -- not a bailout -- to the Big Three.
After all, their livelihood is at stake. The Center for Automotive Research in Ann Arbor estimates that auto suppliers employ almost 120,000 Michigan workers.
Nationwide, that number tops 500,000. It's nearly double the total workforce of GM, Ford Motor Co. and Chrysler LLC combined.
These are the companies that manufacture parts, plastic molds and even boxes for the automakers. Around the country, the credit crisis has hit them hard.
Analysts say their sales have dropped, too. Plus, no banks seem to want to lend anymore -- especially to companies so dependent on the troubled auto industry.
Steve Landaal runs a packaging supplier in Burton. He says his company is doing all right for now, but GM makes up 53 percent of his business.
"I think that everyone's very concerned about what we're watching in Washington this week," he said.
"I think it affects the lives of not only everyone here in the Midwest, but everybody around the country and the world.
"If the auto industry were to fail and go under, I feel like the ripple effect would be more like a tsunami."
"Their dealers are in every Main Street in America and their suppliers exist in most of our states," said Sen. Carl Levin.
As the politicians argue on Capitol Hill, Lapeer's Mold Masters CEO Mitch Monczka is left to wonder: What if his biggest customer, GM, went under?
"Strategically, we have some things we could do short term. Long term, we'd be devastated," he said.
Mold Masters produces automotive interior components, such as glove boxes for GM trucks. He employs about 300 workers.
"It surprises me people who are supposedly the leaders of the country are so obtuse about a serious issue like this," Monczka said.
In Flint, GM Security Packaging employs 200 workers.
"I'd hate to think what would happen if GM went under. I'd like to think that would never happen," said Security Packaging's Andy Goggins.
But as the Big Three fight for their survival, these three companies are fighting for theirs. And Landaal is waiting to see what happens to his biggest customer.
"We are playing out those scenarios right now as far as cash flow and availability with our lenders to ensure to survive that, but quite frankly, I don't know that we could," he said.
Some analysts warn a loan to the Big Three would still leave problems for the auto suppliers. After all, credit is still tight.
Comment on this story below and we may read what you have to say on the air.
Source:http://abclocal.go.com/wjrt/story?section=news/local&id=6514656
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