Pileup foreseen if Big 3 crash

A number of Republicans who came under attack for supporting the $700-billion Wall Street bailout have been hesitant to back new aid to the auto industry. Sen. John Cornyn (R-Texas), who backed the banking system cash, said: "Like most Americans who are concerned about the direction of our economy and more federal spending, I must also ask: When is enough enough?"

What Congress decides could have serious effects on not just employees of Ford, GM and Chrysler but also those who work at such companies as Superior Industries International of Van Nuys, which makes the F-150's wheels. Superior will close its Pittsburg aluminum wheel plant next month, laying off about 600 employees, because its shipments in the third quarter dropped to the lowest level in a decade.

In Peachtree City, Panasonic Automotive Systems Co. of America has notified its approximately 500 employees who make car stereos, GPS devices and rear-seat DVD entertainment systems that they'll be out of work by the end of next year.

It's a similar story at AK Steel Corp., which relies on the auto market for 30% of its business. The company has temporarily shut down its Mansfield, Ohio, plant because of low demand for the stainless steel it produces for exhaust systems.

"This industry has just nose-dived," said Neil DeKoker, chief executive of the trade group Original Equipment Suppliers Assn. He estimates that among the roughly 5,000 U.S. suppliers, more than 100,000 jobs have been shed in the last two years as carmakers order increasingly fewer parts. According to a study by advisory firm BBK, 17% of suppliers were at risk of bankruptcy at the outset of 2008, and the study's author believes that figure has risen significantly this year.

The vast majority of suppliers get 60% or more of their orders from the auto industry, making the companies particularly vulnerable to a downturn in demand for cars. Detroit's routine requests for lower prices on parts only compound the problem, DeKoker said. "This could be the last breath for some of these suppliers. Some are just not going to make it."

The Big Three spend about $300 billion a year on equipment, supplies, tooling and parts ranging from transmissions to shop rags. In the U.S. alone, Ford spends more than $40 billion.

GM spends $7 billion a year transporting parts to factories and hauling automobiles to dealers. That makes railroads and trucking firms huge clients of the Big Three. No wonder that with car sales down, Norfolk Southern Corp. reported a 30% decline in rail car business in the third quarter compared with a year earlier.