Just when you thought things couldn't get any worse for U.S. suppliers, a new study arrives. This time the consulting firm AlixPartners LLC found that at least 38 percent of North America's auto parts makers are in "fiscal danger" and could face bankruptcy during the next two years. And, yes, that means more bankruptcy filings by public and private suppliers -- and heightened risks for automakers, says John Hoffecker, a managing director at AlixPartners.
"Suppliers and automakers alike are at a crossroads," he told a gathering of the Original Equipment Suppliers Association in suburban Detroit last week.
Hoffecker called for suppliers to take urgent actions. They must reduce expenses and develop innovative products. They must improve financials, ranging from maximizing cash flow to improving working capital. Hoffecker said that last year was a tough one for suppliers, with 25 percent worldwide suffering significant deterioration in financial performance.
