Old supplier contracts are torn up. Outstanding debt is converted to new paper.
If these suppliers want to continue doing business, they will have to renegotiate or stick with Ford and cut half of their capacity.
WOW, just screw the suppliers that have stuck with the companies for years?
Oh, and one other thing. Thanks to offshoring, there really are not that many surplus suppliers in the pipe. You take a company like Johnson Control or TRW which have big footprints in the industry and move out their biggest customers, there is not a US supplier to fill the gap if they destabilize.
And if they go, they affect Honda, Toyota, Suburu, Mercedes, everyone.
The cascade of just screwing Tier1 suppliers because they are "old paper" is foolhardy. We have devastated this country's manufacturing base enough.