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GM, Chrysler Aren't The Only Busted Ones
By Marc Tracy
Ever since the prospect of massive bailouts of Detroit's Big Three was raised several months ago, we've pointed out that their implosion would threaten thousands and thousands of small businesses who are tied up, directly or indirectly, with General Motors, Ford, and Chrysler. Well, Chrysler is bankrupt, and ready to be sold to Fiat; GM is bankrupt and ready to see itself become a ward of the taxpayers and the workers (Ford is actually doing pretty well, thank you for very much).
The New York Times takes a look at auto suppliers, mostly in the Midwest--who, together, employ more people than the Big Three do (and certainly more than they will after they are slimmed down; GM alone is cutting about a third of its workforce). Of the roughly 4,000, an estimated 500 will go bankrupt this year. And many of them are quite small.
The Lansing, Mich.-based Strong Brothers, for example, had seven employees back when it was making lots of fenders and hoods for GM (it also wisely diversified into airplane parts). Now, they're down to three employees, and the outlook isn't brilliant.
Like the Strong Brothers, other small suppliers are attempting diversification. One now makes food and beverage packaging; another is looking into manufacturing opportunities in the energy and medical industries. (If you can diversify without fundamentally altering your business altogether, it seems to be a smart strategy.)
The article is sobering and saddening. And what's worse is to think that it barely even scratches the surface. Directly implicated small businesses are surely myriad. Indirectly impacted ones--the small businesses dotting Midwestern cities and towns, reliant for their customers on the continued economic activity of those three diminished industrial giants--are surely much more numerous.
Comments (0)June 4, 2009 9:15 AM
