Struggling automotive suppliers hit hard by rising raw material prices and drastic cuts in US production are getting some much needed help from car makers.
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Daimler, Fiat and BMW have all stepped in to help suppliers in order to keep their assembly lines from stalling.
“When a supplier gets into financial trouble, we normally help,” Opel managing director Hans Demant told Automotive News Europe (ANE). “Should that be technical help, financial help or managerial help, we try to keep as many as we can alive.”
Fiat has bought three of its suppliers, BMW has given financial help to six component makers and Daimler has provided EUR82m in financial support to suppliers.
A 2007 report on the financial health of the global supply base by BBK Ratings revealed that 14% of European suppliers and 33% of North American suppliers appeared to be at various levels of financial distress.
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By GlobalDataThomas Besson, an automotive analyst at Merrill Lynch in London, believes the trend of automakers providing financial support will continue this year.
“Automakers need to face the fact that suppliers are in for a difficult year,” he said.
