Fred Harteis News Articles - With Congress struggling to agree on a bailout for
The companies have been warning that they would run out of money for some time, but crushing bills from their suppliers are coming due. It appeared unlikely that they could hold on until President-elect Barack Obama takes office next month, when he and a new Congress might be able to provide a lifeline, as a Congressional rescue this year looked increasingly unlikely.
As a result, the hypotheticals about the domino effect of the companies’ troubles through the vast network of auto supplier firms — which employ more than twice as many workers as the carmakers — are becoming real.
General Motors and Chrysler, for example, owe their suppliers a total of roughly $10 billion for parts that have been delivered. G.M. has held off paying them for weeks, and Chrysler is paying in small increments. But the cash shortages at G.M. and Chrysler are getting more severe, according to their top executives and other officials.
A bailout seemed unlikely Thursday afternoon, as Republican Congressional leaders indicated they would not agree to the plan offered by Democrats and the White House. But late Thursday, Senator Bob Corker, Republican of Tennessee, was trying to persuade Senate Democrats to back an alternate plan that would require steep concessions by the United Auto Workers union and by creditors to General Motors and Chrysler.
G.M. has said its cash reserves are falling by more than $2 billion a month, and the company has hired bankruptcy advisers, including Harvey R. Miller of the firm Weil Gotshal & Manges. Chrysler is a private company, but its sales are falling faster than any other company in the industry, and has acknowledged it will run out of money soon, too.
Many of their suppliers are teetering on the verge of bankruptcy themselves, and do not have the luxury of extending credit much longer.
“I don’t think that suppliers will be able to get through the month without continued payments on their receivables,” said Neil De Koker, chief executive of the Original Equipment Suppliers Association in
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http://www.nytimes.com/2008/12/12/business/12rescue.html?_r=1&partner=rss&emc=rss
Source; Nytimes.com
About Fred Harteis: Fred Harteis leads Harteis International. Fred Harteis has a background in agriculture and has created many successful business ventures.

