Word: thornton
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Much of the automakers' argument hinges on the notion that the collapse of any of the key industry players would aggravate an already troubled economy. Fully one-third of automotive industry suppliers were deemed at risk of bankruptcy, according to a study earlier this year by Grant Thornton, a Southfield, Michigan, consulting firm. If General Motors files for bankruptcy, it will further impede its ability to pay its suppliers in full, on time. Many suppliers are already saddled with debt. So the extra burden will likely obliterate suppliers' operating budgets - and, in turn, cripple their ability to deliver goods...
Experts say the suppliers most vulnerable to collapse are those whose businesses are heavily dependent on the ailing U.S. automakers, or on raw materials for which rising costs cannot be easily passed onto the automakers. Kimberly Rodriguez, automotive industry analyst at Grant Thornton, says concern about how suppliers will be impacted is justified: "It's not hype. It's huge." (See the 10 Things to Do With Your Money Right...
...slowing economy and a dearth of financing for would-be car buyers. Total U.S. car and light-truck sales this year could come in at 13.5 million, 2.6 million fewer than last year. "That's in nobody's business plan," says Kimberly Rodriguez, an automotive specialist with Grant Thornton. "The best planning in the world cannot survive that fluctuation." It's now clear that GM can't survive as an ongoing entity without massive federal assistance. The company is burning through more than $2 billion each month. It has $16 billion left. As if they were aboard a dirigible losing...
...workers pain. Assuming the government bridges GM to the future - or provides debtor-in-possession financing in a bankruptcy - there is still a ton of restructuring to do. The company operates 21 plants in North America and has three more that are scheduled to close. But Grant Thornton's Rodriguez says that still leaves five to go to match demand. "They still need to take structural steps: reduce suppliers, reduce the number of plants, reduce the cost structure and get rid of excessive debt." Most analysts say GM has to dump underperforming brands...
...even more fascinating to read a book written just before the onset of a worldwide financial crisis. "The effects of a strong market have spread well beyond collectors' complaints of skyrocketed prices and the dramatic expansion of many galleries' square footage," Thornton writes. "The wealth trickles down. More artists are making a better living; a few are as rich as pop stars. Critics are busy churning out words to fill expanded editorial pages." In a few years time, Seven Days may come to be seen as one of the first chronicles of a now-bygone...