Crain’s Detroit Business reports that the possibility of bankruptcy by GM may lead to the Wall Street credit ratings of their major suppliers being downgraded:
Six auto suppliers were placed on review late Thursday for a possible ratings downgrade on fears of a potential bankruptcy at General Motors.
Wall Street credit ratings firm Fitch Ratings placed the suppliers’ issuer default ratings, which grade a company’s ability to meet financial obligations, on watch late Thursday…
The companies were placed on review because of the impact of a possible Chapter 11 bankruptcy at GM, and Fitch’s view that Ford Motor Co. would also fall into Chapter 11 if GM sought court protection, according to a Fitch memo.
The note said auto industry bankruptcies could result from a failure of the $14 billion federal aid package slated for GM and Chrysler L.L.C. to receive congressional approval, or a failure of the Detroit 3 to develop viable restructuring plans.
The fallout from the failure of the bailout bill in the Senate begins.