How Will GM and Chrysler Bankruptcy Affect Parts Suppliers?

With GM and Chrysler now in bankruptcy, what about the suppliers network?

In these videos, Steve Hilfinger managing partner of Foley and Lardner in Detroit and Sheppard and Mullin's restructuring and bankruptcy expert Ed Tillinghast comments on the GM bankruptcy with Scott Drake,

We are estimating that 500 suppliers out of 4,000 could go out of business between now and the end of the year,” said Neil DeKoker, chief executive of the Original Equipment Suppliers Association. Billings just to the three Detroit automakers from the nation’s auto suppliers have fallen to $7 billion a month, on average, from $16 billion in January, he said.

Auto suppliers, which employ more workers than the car companies themselves, have cut way back, almost hibernating, as they lay off employees earning $10 to $22 an hour, or cut back their hours. (Source: NY Times)

Steven H. Hilfinger is the managing partner of the Detroit office of Foley & Lardner LLP. Mr. Hilfinger was a founding partner of the firm's Detroit office in 2000. He is co-chair of the firm's Automotive Industry Team and a member of the Transactional & Securities Practice. Mr. Hilfinger focuses his practice in corporate and securities law matters, including mergers and acquisitions, corporate restructurings, venture capital transactions, debt and equity finance transactions, business formation and corporate governance, and general corporate and contract counseling.

Sheppard and Mullin's restructuring and bankruptcy expert Ed Tillinghast comments on the GM reorganization.