U-S automakers were urged (today/yesterday) to check the books on their parts suppliers, of which there are nearly a thousand here in Tennessee. The automotive advisory firm BBK released its study on the potential supplier crisis at the Automotive News Manufacturing Conference in Nashville.
A third of the auto parts suppliers in the U-S are financially distressed according to the industry study by advisory firm BBK. Many more are on the verge of distress, meaning automakers should carefully monitor not just the operational health of their suppliers but the financial health as well.
BBK CEO Bill Diehl says companies in the supply chain to auto manufacturers shouldn’t fear transparency because their competitors are likely facing the same outlook.
“I think too many suppliers believe that they can’t tell their customer that they have a problem. The problem then continues to grow and gets to a point where nobody can fix it…when you look at 46-percent of the privately held suppliers are in some kind of financial distress, you argue that everybody else out there has got a little bit of the same problem.”
64 parts suppliers have declared bankruptcy since 2000, including several with operations in Tennessee. Diehl says auto suppliers aren’t necessarily feeling a trickle-down effect from automakers. They’re simply dealing with similar challenges of smaller margins with higher materials and labor costs.
A hot topic at the conference this week is the emergence of the auto industry in the south. For that reason, Diehl says his international advisory firm BBK will soon open an office in Nashville.
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