Auto suppliers GM bankruptcy will effect.

[Joanne98]

Suppliers
Parts makers reliant on GM already are struggling with lower volumes, tight credit and rolling production shutdowns that reduce demand for parts. Bankruptcy will only deepen the troubles.

GM likely will ask the court to allow it to keep paying key vendors in order to maintain its supply of parts. That will be a relief for suppliers that make the list. It means they are likely to recover at least some of the money they are owed and will continue to do some business with a new GM.

But only if they survive the summer. GM last paid its suppliers at the end of May. With production down and a bankruptcy judge in control of the company, it could be a long time until suppliers see their next check. Analysts say those with balance sheets strong enough to stay afloat until production resumes could benefit from a bankruptcy that hastens the demise of rivals.

Companies already short on cash, such as Lear Corp. and American Axle & Manufacturing Inc., are on shaky ground. GM accounted for 23% of Lear's 2008 sales and 74% of American Axle's. Metaldyne Corp. and Visteon Corp. already have filed for bankruptcy protection, along with smaller suppliers Contech LLC and Hayes Lemmerz International Inc.

Their loss could be a gain for stronger suppliers such as Magna International Inc. and Johnson Controls Inc. It's possible struggling suppliers will get indirect help from the government through GM in the form of a more payments to suppliers than might be the case in a traditional bankruptcy. A person familiar with the Treasury Department's discussions expects more suppliers to file for Chapter 11 and said, "We will support GM -- and Chrysler for that matter -- in trying to make it orderly."

http://online.wsj.com/article/SB124381331678870543.html?ru=yahoo

[beach_house]

1. Hmm, GM is concerning.

But not because of its failure or chapter 11. Business goes through tough times, and this is one of them. GM messed up, so what. Chapter 11 happens.

However, what's concerning is that the US Govt now owns a majority of GM. And this is good how? Now my government is bigger because it bought a "failing" car company? Not much I can do about it, I can't sell my fractional 'share' of GM. However, I've made the decision (while I still have the freedom to do so) to not buy any GM vehicle. I'm a bit surprised that GM continues to have any sales at all - the news should be reporting that GM sales have plummeted to zero (with the exception of govt fleet cars), as soon as the govt became majority owner. How come people are still buying GM cars?

Does anyone have any info where I can sell my 'share' of GM? Hopefully I can exchange it for something of value, like a coffee.