Just as the supply chain is smoothing out and the cadence of production improves, automotive suppliers are now seeing red where balance sheets had long been stable.
The soaring cost of money and tightening credit conditions are hurting liquidity, and in some cases, tipping financially distressed companies into insolvency.
Small- and mid-size suppliers that are heavily leveraged with a large amount of variable interest debt are the most vulnerable. That applies to many manufacturers in Michigan, said Steven Wybo, senior restructuring and management consultant at Detroit area firm Riveron.