Auto Industry Expects Supplier Bankruptcies

February may not be a lovely month for the auto industry. This is because of the remarkable auto parts supplier bankruptcies which are expected to begin this February. The information was divulged by Ford Motor Company's global purchasing chief Tony Brown.

In a speech at the 2007 Automotive News World Congress, Brown said, “Industry experts and others at restructuring firms working with financially troubled suppliers expect we may well see in February the largest number of bankruptcy filings in the U.S. and Europe ever. The number of financially distressed suppliers that Ford has on our 'watch list' in 2007 has grown by 44 percent compared to this time last year."

Brown added there could be some big-name “Tier 1” suppliers that are included in bankruptcy pandemonium. However, Brown did not go into specifics. "We're not done yet," he said. "There's still excess capacity in the system." Just as the Detroit automakers are trying to restructure to cope with the tough competition and reduction of demands, Brown said auto parts suppliers necessitate an immediate realignment.

Ford is standing by its restructure campaign called “Way Forward.” Said campaign resulted to several plant closures, job cuts and eventually the launch of upgraded vehicles that make up the latest lineup of the automaker. Ford is determined to alleviate its ailing condition by launching new vehicles that would capture both the needs and desires of auto aficionados. The present lineup and the forthcoming lineups are expected to showcase a brand new direction. Hopefully, this direction will not lead the automaker astray.

According to analysts in the auto industry, Ford is definitely moving forward but it lacks the acceleration needed. To circumvent this, the automaker intends to work more collaboratively with the remaining auto parts suppliers. Brown said Ford also continues to work with the other five largest automakers to create a steel purchasing exchange that would allow them to better weather the ups and downs of steel prices. He also divulged that the discussions started among them are continuing up to the present time. The automakers also are negotiating with steel producers, whom Brown said would also benefit from such an arrangement. "They need stability, too," Brown concluded.

Aside from auto body parts suppliers, the automaker is also negotiating with air intake system manufacturers to enhance emissions and fuel efficiency level. Air intake is crucial in the reduction of restriction of air flow to eventually deliver greater power to the vehicle. There are ample of air intake systems available in the market. They vary in power and design.

Aside from Ford, the AEM cold air intake for the Dodge Dakota is said to be efficient. K&N, Volant and other sophisticated cold air intake filter system transform an ordinary vehicle into a high-performing auto machine. These vehicles scream hot performance.

Joe Thompson is the owner of a successful auto body shop in Ferndale, California. This 38 year old is also a prolific writer, contributing automotive related articles to various publications.