Survivors of 2009's automotive business crash are facing a whole new challenge now: recovery.
Automakers anxious to begin making cars and trucks that consumers want to buy are calling on their supply base to get ready to build but new business will mean new expenses for suppliers for equipment, engineering, resin and other raw materials.
With banks still cautious about loaning money to manufacturers, it is going to be hard for many companies to meet the new demands, while those with access to capital will stand out, consultants say.
The haves and the have-nots are separating themselves, said Kim Korth, president of Grand Rapids, Mich.-based consulting firm IRN Inc.
We don't think you're going to see huge consolidation with large sections of the supply base going away, but the people making money are going to become clearer and clearer.
The global auto industry is entering 2010 on firmer footing than at the start of 2009, in part because of the shake-ups that took place during 2009.
Both General Motors Corp. and Chrysler Group LLC ended up under Chapter 11 protection in U.S. Bankruptcy Court, with federal government support helping to clear them through the process in just weeks. Italy's Fiat SpA now owns a controlling stake in Auburn Hills, Mich.-based Chrysler while Detroit-based GM's biggest shareholder is the U.S. government.
The shakeout rolled throughout the industry, though, with North American production slowing to less than 9 million vehicles, compared with 12.6 million in 2008.
The slowdown prompted hundreds of plant closures and pushed suppliers including Visteon Corp. into Chapter 11 as well. Many smaller firms simply and quietly closed for good.
But many more parts makers managed to hang on, in part because GM and Chrysler's time in bankruptcy forced those companies to pay cash on delivery for parts, rather than putting off payment for weeks or months. That was just the money some companies needed, Korth said.
Now the industry is expected to begin a slow growth back up to about 10 million vehicles in 2010, with recovery really taking place in 2011 and 2012. But Mike Wall, director of global financial services with consulting group CSM Worldwide Inc. of Northville, Mich., noted that not every firm will have financing in line to pay for future work.
That will lead carmakers to seek out the most stable companies, which in turn will lead to a bigger gap between the leading firms and the rest of the pack.
It's going to be a two-tier system, Korth said.
It will also allow those top companies to get better prices for their parts and fight the regular price reductions the industry typically has demanded. In a survey released Dec. 8, IRN found that parts makers committed to only 1.9 percent in cost reductions on average in 2009, compared with 3 percent in 2005 and 3.6 percent in 2003.
Price is not the biggest issue anymore, she said.
At the same time, the belt-tightening that was required in 2009 within the supplier base is expected to help companies find profit even at lower production levels. The Original Equipment Suppliers Association reported suppliers can now turn a profit at a production level of 10 million vehicles annually.
Two to three years ago, you'd be lucky to find people who could make money at 13 million, Korth said.
So suppliers still standing may be able to leverage their financial or technical capabilities now more than in past years.
I've had a lot of people referring to it as the last-man-standing strategy, and if you made it through  without any real damage to your business, you're going to find you can control more going forward, Korth said.
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