Recent news about auto parts suppliers.
Here in America, our cars and trucks are a very important part of our everyday lives. Most of us could not function without them. Many of you know that if one little part goes wrong, it could put the whole vehicle out of commission. And there are a lot of parts.
The auto makers, such as Ford, GM, Toyota, etc., who make our cars, do so with parts they receive from their suppliers. And many of these suppliers are experiencing tough times right now. Some, including Delphi Corp., have had to file for bankruptcy. This definitely can put a kink in the auto makers plans. However, the auto makers themselves might be partly to blame.
One of the reasons many auto parts suppliers are facing difficulties is because auto makers have been demanding lower prices. This would hurt by itself, but the suppliers have had to face rising costs for the materials used to make their parts.
How has this affected the auto makers? Two, specifically, have made news in this department of late.
Toyota has been working hard to secure its relationship to its suppliers by working more closely with them. They hope this will help bring costs down for the parts makers and keep their supply chain moving properly.
Meanwhile, Ford has made news advocating some bankruptcy reform for the parts suppliers. Naturally they would be worried because when their suppliers file for bankruptcy the supply chain is rudely interrupted.
This just goes to show that when one part fails the whole chain is in trouble.