As U.S. Car Companies Sink, Their Suppliers Are Dragged Down With Them

Implications: The old saying was: "As GM goes, so goes the nation." Well, times have changed, now it seems: "As GM goes, so goes their suppliers."

Analysis: Led by a startling drop in the stock price of General Motors Corp. to a low not seen in 50 plus years, several major auto suppliers also are along for the wild and not-so-enjoyable ride.

GM's stock price, which had stumbled into single-digit territory last week, recovered slightly just before the market's long pause before the Fourth of July holiday weekend, closing at $10.18.

And as GM goes, so goes their suppliers, apparently - some of whom had moved to reasonale recoveries earlier in the year. But as analysts downgrade GM and other major automakers such as Ford Motor Co. , the fortunes of their major suppliers are slipping also, some into alarming territory.

Mega-supplier Visteon Corp. , for one, last week slid to its lowest price since the company was spun off from Ford in mid 2000. Visteon closed Thursday at $2.18, off nearly 75% from this time last year.

ArvinMentor Inc. , which supplies numerous components for both the auto industry and the similarly hard-hit trucking sector, also approached a low not seen since its inception in 2000. The company also appeared to be rebounding after tumbling late last year, but now at $10.75 stands with a stock price that has receded nearly two-thirds from its 2002 high point.

Even BorgWarner Inc. , supplier of in-demand components such as turbochargers and all-wheel-drive systems and widely seen as one of the healthiest of automotive suppliers, has endured a dip in its stock price of nearly 30% just since last May.

Not enough bad news? Consider this: I didn't even mention the already beleaguered suppliers such as Delphi, American Axle, Dura Automotive, etc.