Auto Suppliers Brace For Hit

[Purveyor]

Source: Detroit News

Christine Tierney and Bryce G. Hoffman / The Detroit News

The bankruptcies of Visteon Corp. and Metaldyne Corp., occurring within hours of each other on Thursday, could be just the first in a rash of failures of auto parts suppliers starved by huge cuts in U.S. vehicle production.

"There'll be a series of bankruptcies," said Kirk Ludtke, an investment adviser with CRT Capital Group LLC in Stamford, Conn. "We're in the early stages of the process, unfortunately."

Senior members of the Obama administration, including Secretary of Transportation Ray LaHood and Secretary of Energy Steven Chu, are likely to hear dire accounts next week as they tour hard-hit parts of the Midwest.

More than half a million people in the region work for suppliers, which account for the largest number of manufacturing jobs in Michigan and several other Midwestern states.

With banks reluctant to lend money to automakers or their suppliers, the pressure is mounting on Detroit's struggling carmakers and the U.S. government to provide the funds to keep the supply base from unraveling.




Read more: http://www.detnews.com/article/20090529/AUTO01/905290359/Auto-suppliers-brace-for-hit