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By all accounts, the U.S. automotive industry is facing unprecedented challenges brought about by a perfect storm of convergent, declining macroeconomic conditions. Restructuring efforts of the Original Equipment Manufacturers (OEMs) and their derivative supply chains and dealer networks are being thwarted by the impact of record high gas prices, deteriorating consumer confidence, a global credit crisis and skyrocketing raw materials costs. Despite all the recent media attention focused on bankruptcy concerns among the domestic three automakers, we do not anticipate any domestic OEM filing for bankruptcy protection. However, we anticipate increased bankruptcy activity within the supplier base in the latter part of 2008 and into 2009.
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