En
See our previous analyses of other bankruptcies in the auto industry.
]]>Indeed, things looked grim starting for Visteon in January of 2008:
Similarly, things looked grim for Metaldyne starting in February of 2008:
“One in four major Chinese manufacturers shipped less than half as much to U.S. customers in November through January than they did a year earlier, [Panjiva CEO Josh Green] said.”
http://www.newsweek.com/id/
“Panjiva data shows that 132 of the Big Three’s overseas suppliers wound up on Panjiva’s watch list at the end of January 2009”
http://www.cio.com/article/486380/Why_U.S._Taxpayers_Will_Bail_Out_Foreign_Automotive_Suppliers_
“Yesterday, Panjiva came out with news that paints a dangerous and ugly picture when it comes to the financial viability of global suppliers.”
“What can you do about supplier disappearing acts? I’d recommend a heathy dose of supplier risk preventive medicine to start, using both internal performance and quality related information as well as proactive third-party content from providers like Panjiva and D&B.”
http://www.spendmatters.com/index.cfm/2009/3/16/When-Suppliers-Just-Disappear
Supply & Demand Chain Executive
“Panjiva analysis shows nearly half of large U.S. buyers doing business with troubled global manufacturers; ‘they never even tell you they are in trouble…they just disappear'”
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Methodological note: though this graph looks much the same as the previous GM graph (i.e., massive drop-off), there is an important difference. It turns out that we have data on shipments to GM’s Mexican operations, and this time around, we included these shipments in our analysis… Hence, more shipments across all time periods.
]]>- In July of 2007, Ford received received 914 shipments from overseas suppliers. By January of 2009, this number had dropped to 514 shipments… a 44% decline from its July 07 peak.
- In September of 2007, GM received received 223 shipments from overseas suppliers. By January of 2009, this number had dropped to 84 shipments… a 62% decline from its September 07 peak.
- In November of 2007, Chrysler received received 342 shipments from overseas suppliers. By January of 2009, this number had dropped to 38 shipments… an 89% decline from its November 07 peak.
(If you compare January 09 to January 08, the declines are 25%, 50%, and 71%, respectively.)
These massive drop-offs in shipments from suppliers are indicative of diminished Big Three expectations about future sales. Not to be underestimated is the impact that these drop-offs will have on suppliers. Many of the Big Three’s overseas suppliers (132) were on Panjiva’s Watch List as of the end of January, as a result of suffering a 50% decline in volume shipped to U.S. customers in the most recent three month period versus the same period a year ago. That’s about 16% of the Big Three’s overseas suppliers.
Those charged with assisting the auto industry are right to worry about the health of suppliers. Even if consumer demand picks up, the Big Three will not survive if their supply chains disappear. However, it’s not just domestic suppliers that are in trouble right now — overseas suppliers are in trouble too.
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