It’s causing a “massive ripple effect” through the supply chain as the risk of bankruptcy rises among pretty much any business linked to the automotive industry.

Up to one-third of the North American businesses that produce and supply auto parts teeter at the edge of filing for bankruptcy, experts warn. It’s not the big Ford and GM auto plants — there would be cataclysmic effects if that happened.

Instead, it’s the hundreds of supporting businesses, ones you might rely on for your own livelihood, that are feeling the pain.

The problem, of course, is that sales of pick-up trucks and larger SUVs have dropped faster than Olympic swimming records have for Michael Phelps.

You need to keep an eye out for companies that produce:

• lift gates
• chassis systems
• NVH systems
• driveline and drivetrain parts, and
• scores of other parts.

The rising cost of raw materials are hitting these companies hard, and some can’t absorb the body blows.

These problems and the availability of parts extend beyond the automotive industry. Any business that relies on manufactured parts could find itself scrapping for survival.

To protect your Purchasing abilities, to help keep vital parts coming in to your business, now might be a good time to explore the availability of back-up sources. It’ll only take a phone call (or e-mail) or two.

Tags: bankruptcy, purchasing, supply chain