Perhaps this is part of their evil plan.
Toyota knows the loan will only delay their eventual bankruptcy for a few months, giving them time to get all the suppliers fears calmed.

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Lear,johnson controls,delphi,goodyear(all tire mans.).Think......every single part in a car or truck has to be made by someone.The parts don't just appear at the plant.Nuts ,bolts ,screws ash trays ,everything.The parts in the american cars and the foreign cars come from the same factories (although many pro foreign fans think they come from some special place that domestics can't get).No ones business can survive if their orders are suddenly cut like they would be.

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Not as easy as compiling a list. Many of these companies don't wanna release this information because it would prevent them from getting new business (which is necessary if these go under).

I know for a fact of a few machining companies that possibly will go under because of the large contracts with these companies. You must keep in mind some of the industry that will go under are subsidiaries of larger companies too. All though the father company will most likely not fail because of there other connections to the air industry, electronics, etc. it is still a large loss for them. To release names just puts them at more of a risk in the long run.

Plus you have to think of the specialty companies like transmissions, braking...etc. And thats a fairly large list. The one thing that is most frustrating is people think there are hundreds of companies who do the suppliers jobs, and well thats not true do to the shear scale that these automotive companies need.

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How would their orders be cut to 0 if an American car company fails? Assuming a steady demand for new cars, those orders would simply shift to Toyota or the other 2 surviving US car companies. If the market is going to contract, it's going to do so with or without the Big 3, keeping 1 or all of them on life support will do nothing to effect demand.

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There was one gentleman representing a supplier during the hearings a few weeks ago who was saying his company would be fine because a majority of his business is not dependent upon the Detroit 3. Forgive me because I honestly cannot think of the gentleman's name or his company but it is a large company, I believe based in Michigan. Sorry for the brain fart.

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mmstowes:
The supplier representative that testified was from Johnson Controls.

Johnson Controls supplies interior parts, seats and batteries to automotive companies. They also have a division that deals with HVAC in building construction, as well as aftermarket battery business.

JCI would survive as a company.... the HVAC and aftermarket battery business, but that doesn't necessairly mean they would continue to supply interior components, seats, and batteries to OE customers.

@ Josiah:
Think of it this way... If a supplier company were to sell parts to Ford for say the F-150 and to a Toyota plant.... how can they sustain operations when they used to sell almost 1,000,000 parts a year for the F-150 and another 150,000 or so to Toyota. Slashing their volume like that, I would believe, destroy the supplier, and they would no longer be shipping to Toyota either.

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There are approximately 35,000 different part numbers in the average North American vehicle. How many suppliers do u think it takes to make all those pieces?

GM says they have over 3000.
Ford has over 1600, and they are trying to cut that list to 1000.

Most of these companies also do business with one or more transplant automaker. Let's say you do 50% of yr business with GM, 25% with Toyota and 25% with somebody else.

Now, GM does not pay their bills for 180 days, and has done this for years. If u don't agree to this practice, your biggest customer goes somewhere else. So they owe you millions, or 10s of millions, or more, for parts already shipped. You're running on credit based on accounts receivable. GM files Chapter 11, your credit disappears and you're going BK too. If even half of GM's suppliers went under, the effect on the entire North American auto industry would be a disaster.

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"Statement of
Keith Wandell, President and Chief Operating Officer
Johnson Controls, Inc.
Before the Senate Banking, Housing and Urban Affairs Committee
On The State of the Domestic Automobile Industry: Part II
December 4, 2008
Chairman Dodd, Senator Shelby and Members of the Committee,
thank you for the opportunity to provide testimony on the state of the
domestic automotive industry. My name is Keith Wandell and I am
President and Chief Operating Officer of Johnson Controls, Inc., a global
multi-industry company with sales of $38 billion in 2008. Approximately
37% of our sales involve the supply of systems and services to improve the
energy efficiency of nonresidential and residential buildings worldwide. We
are also the largest supplier of batteries to the automotive aftermarket and
original equipment manufacturers.

In addition, Johnson Controls is the 7th largest automotive supplier in
the world. We are the third largest supplier in North America behind
Magna, a Canadian company, and Delphi, a U.S. company which has been
in bankruptcy since 2005. Our global sales of seats and other interior
products to the auto industry totaled $19 billion, $6.7 billion of which are to
the North American market. We supply every automaker with a presence
in the U.S.: Chrysler, Ford, GM, Honda, Hyundai-Kia, Mazda, Mercedes,
Mitsubishi, Nissan, and Toyota. Johnson Controls has 43,000 employees
in the U.S. with operations in all 50 states. Some 22,000 are employed in
the states represented by the members of this Committee.
While Johnson Controls is a key supplier to the global automotive
industry we are an atypical automotive supplier. We are much larger and
more diversified by product, geography, and markets. Being a supplier of
interior systems, we are less capital intensive than many automotive
suppliers. We are profitable, and we have a strong balance sheet. We do,
however, share the same issues and concerns about the domestic
automotive industry as those suppliers which are solely dedicated to the
automotive market.

A Detroit 3 failure would have dire economic ramifications for the vast
interconnected supply chain of companies providing the parts and
components which enable the U.S. automakers to assemble vehicles. Our
main concern is that once cascading supply chain interruptions would
begin, many suppliers will fail due to the interdependence of the supply
chain, causing some companies to fail that could otherwise have continued
operations. Many of the companies which would be impacted are small,
women and minority-owned businesses.
At Johnson Controls we are proud to have many jointventures/
partnerships and supply arrangements with women and minorityowned
businesses. This year for the second time we were named
“Corporation of the Year” by the National Minority Supplier Development
Council, in part, in recognition of the $1.7 billion of goods and services we
purchased from minority and female-owned business. I can assure you
that each of the Detroit 3 is equally committed to the development of
women and minority-owned businesses with a combined purchase of
approximately $12 billion from such businesses in the last year. Should
any one of the U.S. automakers suddenly fail, the vast majority of these
businesses will fail and fail quickly.

Let me share an example with you. Recently, a minority supplier to
Johnson Controls, Plastech Engineered Products, failed and went into
bankruptcy. This supplier had $800 million of revenue, shipped 6,200 part
numbers from 11,350 tool sets providing parts to 52 vehicle assembly
plants, 121 vehicle lines and 12 customers: General Motors, Ford,
Chrysler, Volkswagen, Mercedes, Honda, Toyota, Nissan, Hyundai-Kia,
AM General, Mazda and Mitsubishi. Had Johnson Controls and the firsttier
lending group not acquired Plastech’s assets out of bankruptcy,
assembled an operating team to manage the process, and provided bridge
financing, the supplier would have been liquidated, and forced the
shutdown of these 52 assembly plants to one degree or another for varying
durations.
A year ago approximately 20% of Johnson Controls automotive
suppliers were financially distressed according to independent third parties.
Since the rapid deterioration of industry volumes that number has grown to
beyond 35% and continues to grow. Johnson Controls suppliers employ
100,000 people in the U.S. so you can understand how serious this
situation has become.

Should one of the Detroit 3 fail a significant number of supplier
failures would occur and become unmanageable. These suppliers, in
general, support all three automakers and many, like Plastech and
Johnson Controls, also supply the Asian and European transplants in the
U.S. I can assure you that even though Toyota, Nissan, Honda and other
foreign automakers are not here today, they too are deeply concerned
about the viability of the U.S. supply base. The automotive suppliers are
financially distressed due to reduced cash flows resulting from the recent
volume reductions, they are experiencing higher borrowing costs and many
cannot access the credit markets at all.
None of us would disagree that major changes are needed in the
North American automotive industry. This is obvious as shown in the plans
submitted by the Detroit 3 for these hearings. It is in the best interest of all
constituents that these changes occur in an orderly fashion which is
unlikely if we allow even one of these companies to fail.

It is extremely important that we have a sound, healthy and
sustainable U.S.- owned automotive industry that is competitive globally.
I do not believe that Americans want to yield an industry that impacts
millions of jobs, invests billions of dollars in technology and will help secure
our energy independence through new, innovative and environmentally
friendly transportation. It is just as important that our domestic supply base
is strong as it delivers 70% of the value-added components of a vehicle
and 40% of the research and development dollars spent.
The plans that have been submitted address many of the issues that
have been burdensome to the health of this industry: excess capacity,
proliferation of brands, a sub-optimized dealer network and an
uncompetitive cost structure. Given the opportunity to continue to address
these challenges the Detroit 3 would be able to invest at an even greater
rate to bring to market the consumer-desired fuel efficient, environmentally
friendly vehicles.

Our company is also a leader in helping to develop fuel efficient
vehicles. In our automotive seating and interiors business we are
constantly striving to reduce weight in our components to help increase fuel
efficiency and to introduce recyclable and renewable materials into our
products. We are also developing the next generation of battery systems
for hybrid and plug-in electric vehicles, and we are working with the Detroit
3 to bring these environmentally favorable vehicles to market.
I was also asked to comment on the potential impact of a Detroit 3
failure on Johnson Controls. Earlier I said that we are diversified, profitable
and have a strong balance sheet. Unlike many automotive suppliers, we
would weather this storm largely due to our strong non-automotive
businesses. A Detroit 3 failure would have a short/mid-term impact on our
cash flow, access to capital and cost of borrowing. One of the bigger
impacts would be the curtailment of our investments in new technologies in
all of our businesses, including hybrid vehicle battery technology.

The U.S. industry has a long and proud heritage; it has played a
significant role in the development of this country’s strong economic
position in the world. Speaking for our company, and, I am sure for all auto
parts suppliers, we respectfully urge the Members of this Committee, and
the Congress as a whole, to provide the financial support the automakers
need at this critical time. Each is on their own path to improve their
performance and the fuel efficiency of the vehicles they produce. But their
progress has been hampered by the current economic crisis which has
tightened access to consumer credit and further eroded vehicle sales.
To avoid drastic economic ramifications to the automotive industry
supply chain, including hundreds of small and medium-sized businesses
throughout the country, we hope the Congress will take positive action to
assist this vital U.S. industry.
Thank you for your attention."

http://banking.senate.gov/public/_files/WandellTestimony12408.pdf

If you call that "we'll be fine" then you totally missed the point.

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More like how important and economically significant are you that even your competitors know how severe the impact would be.

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Flylock, according to White House number if D3 fail and their suppliers go down we will lose about 1.7 million jobs. That is not that much. We lost .5 mil in November and yet we are alive.

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Holy crap you are a complete idiot! Yeah we are still alive but things are not good right now wake up! If we lose another 1.5 million jobs on top of what has already been lost things will no doubt be horrible. your ignorance absolutely amazes me.

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LOL, this a recession, a correction. Yeah we will lose more than 1.5, way more, but that is not a reason to reward criminal behavior by D3.

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Of course, that "1.5 million jobs" number isn't quite verified - but even if it's only the D3 and Tier1's that are lost, we're going to push the current unemployment rate from under 7% to close to 9-10%. And if 1 in 10 can't find a job (much less a good-paying manufacturing one), then budget shortfalls all over the US will be a reality.

And mind you, California's budget gap alone is close to $15 Billion - how will we make that up with all the jobs lost in the rest of the US? Where will California export to next?

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The unemployment rate is already over twenty percent in some areas of Michigan. If we lose even one auto company we are completely f*cked.

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