June 5th, 2009 by Alex Coté
When General Motors filed bankruptcy on Monday, June 1 in New York, much of the focus was on the continued loss of jobs, impact on the overall health of the US economy, and the Obama Administration’s plan for the US automotive industry going forward. In our last post we looked at the auto industry suppliers as a whole – here we dig into the suppliers most impacted by the collapse of GM.
Number one on the trade debt claim front (sixth largest creditor overall) was Starcom Mediavest Group which is owned by Publicis Groupe SA and their $121.54 million in exposure. With S&P now looking to potentially downgrade Publicis’ credit rating because of their exposure to GM, it is fair to question the impact on others listed by GM. Publicis makes the list twice with its own claim of $25.2 million, bringing their family exposure total to $146.8 million. Please find the complete list below.
A quick analysis using Cortera’s database of business payment experience shows that with an average payment risk score for this group of companies of 441, this group is already paying their suppliers slower. More than half the list fall into our “Consistently Higher Risk” Category and additional five suppliers fall into our “Higher Risk, Trending Down” category meaning that they are paying very slowly and in a downward trend over the last 3 months. Interestingly, based on the information reported to us, American Axle’s average Days Beyond Terms (DBT) is 7 days versus the industry average for auto parts suppliers of 9.16 days. Similarly, TRW Automotive is also below the industry average. On the other hand, other auto parts suppliers, including number two on the list below, Delphi, has an average DBT of 21 days–well above the industry average.
Are you a supplier to GM or one of their suppliers? How are you handling the bankruptcy?
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