For suppliers, there will be no kindler, gentler Big 3 again this year.
"The Big 3 continue to lose market share and that will continue to put pressure on supplier prices," Wall Street analyst John Casesa warned on Thursday. "A tough environment is getting tougher."
That means suppliers can expect another year of declining profits despite a strengthening U.S. economy and estimated sales of 16.6 million units each year for the next two years, the Merrill Lynch analyst said at the Management Briefing Seminars.
The briefing session's theme of Riding the Storm Out has taken on new meaning for suppliers as raw material prices - steel, copper, aluminum, resin and other commodities - have spiked in recent months even as automakers demand new, lower parts prices.
But not all suppliers have been hurt equally, said consultant Kim Korth.
While price downs contribute to a steady decline in average profits, the industry average is misleading.
Korth, president of consulting firm IRN of Grand Rapids, Mich., said 25 percent of suppliers make 60 percent to 70 percent of the sector's profits.
"There is a huge discrepancy in the industry," she said.
Korth said that while too many suppliers quickly accept automaker demands for price downs, "that business model is unsustainable." The reason: Suppliers are under too much financial pressure from commodity prices and rising interest rates to be as generous to the automakers as in the past.