Canadian Idle: Two Chrysler plants shut down over supplier dispute

[TomServo92]

Link

[lfeg]

Selling parts at a price below cost leads to this, expect to see more. Over the last 10 years with the mandatory 5% per year price reductions just breaking even was dependent on large and ever increasing volumes. With the big slowdown, the lower volumes of parts do not generate the cash flow needed to survive, and no one wants to allow a price increase.

[dave91gt]

I know i would hate to be that supplier. Line shutdown's would likely force an already weak supplier to bankruptcy.

[Critic]

Selling parts at a price below cost leads to this, expect to see more. Over the last 10 years with the mandatory 5% per year price reductions just breaking even was dependent on large and ever increasing volumes. With the big slowdown, the lower volumes of parts do not generate the cash flow needed to survive, and no one wants to allow a price increase.

I don't think very many know about this. These calls for suppliers cutting prices are from people outside the industry. If even one company closes shop, the whole house of cards falls. They wanted divestiture, just in time. Along with that comes problems like this. Ask Delphi how bankruptcy is working out for them.

[old_fairmont_wagon]

This has always been why I prefer second year vehicles. The first year, they're still catching nickle and dime issues that made it through the development and testing process without being caught. The second year, that's all fixed and the suppliers haven't started to really trim out their quality to cut costs yet. By the third and fourth years, suppliers are in the squeeze, part quality gets suspect and often times, manufacturers are decontenting to make units more profitable. That's why second years have been my favorites.