Automakers Scrambling To Conserve Cash.

Automakers Scrambling To Conserve Cash.

The Wall Street Journal (11/24, Aeppel) reports, "U.S. auto suppliers are scrambling to extend their holiday-season shutdowns, shedding workers and developing contingency plans to deal with a potentially devastating failure of some of their biggest customers in Detroit." Meanwhile, "suppliers, still unsure of what will happen to the nation's car makers, are conserving cash by shifting to shorter workweeks, canceling capital-spending plans and accelerating layoffs. Problems in the supply network have the potential to spread pain to a wide swath of the U.S. economy. Auto suppliers employ more than 730,000 workers in the U.S., about three times more than the Big Three."

On the front page of its Business Day section, the New York Times (11/24, B1, Kouwe, Story) reports, "The intertwining troubles of the auto and financial industries were partly behind the sharp sell-off in financial stocks last week, when banking shares fell to their lowest levels since the economic crisis broke out and questions swirled about the future of Citigroup." Businesses and "ordinary people all the way down the automotive food chain are shouldering a lot of debt too. That includes autoworkers, but also everyone from makers of car stereos to dealerships to parts suppliers, as well as the people who work for those companies. Many of these borrowers could run into trouble if the automakers implode, leaving lenders in the lurch. ... A big worry is whether banks that have extended loans or underwritten bonds for the auto industry have held on to this debt or sold it to other investors."