Running out of cash is only one piece of the challenge, observers say. The bigger problems for an industry accustomed to smoothly flowing production and reliable schedules will be operational. Among them:
- Missing players: PwC estimates at least 12 large U.S. suppliers were already facing financial discomfort as 2020 started, simply because of last year’s extended UAW strike against General Motors and a slowdown in business in the otherwise lucrative China market — all before the COVID-19 pandemic.
Now, Ostermann said, without disclosing the specific companies PwC is consulting, other suppliers — especially smaller companies — are going to find themselves in financial distress and possibly going belly up. If they do, their absence will be an added burden for automakers eagerly trying to fire up production.
- Logistics breakdown: Another potential bottleneck, Ostermann predicted, will be trucking companies.
“Many of them won’t be around,” he said. “A $5 billion auto supplier in…
