Detroit 3 Bankruptcy Would ‘implode’ Supply Chain

From “A bankruptcy of even one of the Detroit 3 would cause an already distressed supply base “to implode,” Johnson Controls Inc. President Keith Wandell told Congress today. Testifying in a Senate Banking Committee hearing on a $34 billion automaker bailout request, Wandell said a Detroit 3 failure would cause a cascade of failures among suppliers, particularly smaller female- and ethnic minority-owned companies. Johnson Controls makes seating, batteries and interior parts.

“Wandell said Toyota, Nissan, Honda, Mercedes and all carmakers manufacturing in the United States “are deeply concerned about the viability of the U.S. supply base.” A bankruptcy of one carmaker, he said, would likely cause parts interruptions at all the others.

Wandell said the interdependency of the supply base was driven home during the bankruptcy and eventual liquidation this year of Plastech Engineered Products Inc., formerly the largest minority-owned auto supplier in the world.

He said if Johnson Controls and others hadn’t stepped in and bought Plastech’s assets, as many as 52 vehicle assembly plants would have risked parts interruptions.” Detroit 3 Bankruptcy Would ‘implode’ Supply Chain

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