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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Think4Yourself who wrote (170861)12/12/2008 12:40:35 PM
From: butschi2Read Replies (2) of 306849
 
Suppliers will fold because of huge (forced) trade credit for normally 90 days, parts in the supply chain not billed yet and razor thin margins, already stretched balance sheets and huge overcapacity due to sales down 25% or more.

Perhaps the insurers get hit if the supplier credit is insured as in often Europe or the suppliers go CH11.

Insurance coverance was removed from Ford/Opel in Europe for trade credit to them, therefore suppliers are on their own now, but not delivering is although no option if this means no sales.

They will therefore deliver parts and pray for a rescue.

CH11 not possible because of DIP financing sparse could rip the supply chain.

Due to specialization there are often only few suppliers for special parts, if they go bust there could be a shortage for needed parts.
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