Being as I work for a Tier one parts supplyer it is not a big surprize at all. Delphi is a tier one also.
All the car makers, GM, Ford, Chrysler, Toyota, Honda, Nissan and so one force their suppliers to redue the cost of the prats we provide while increasing the quality. That is a catch 22 for the tier one companies. Our raw goods go upo each year, our energy costs go up every year and our labor costs go up. An example is a spark pug, three years ago we made a net profit of 10 cents a spark plug. This year we make 1 cent profit on a spark plug. Delphi was buying spark plugs from us to sell to GM becuase we could make them cheeper and better quality becuase we do not have all the retirees to support that Delphi does.
I work for the fourth largest auto part suppier in the world. Yet last year Toyota demamded a 15% cost reduction on every part we sell them, GM demaned a 20% cost reduction. On the product my area of the plant makes we are looosing 10 cents on every part we sell to GM, Toyota and Chrysler. This is mainly do to the increase of fuel this year as we have two big kilns. But between the manditory cost reduction and the 150 percent cost increase in fuel we can not make a profit.
I full well expect to see other Tier one compnies file chapter 11 or move to other countries.
Dave, 98 Holiday Rambler Alumalite TT 32FT Front Kitchen two slide out rooms. Pulled by 2006 GMC Crew Cab Dually 4x4, Duramax, Allison , 3.73 gear, SLT trim .
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