Auto supplier woes present a major problem

The government's focus so far has been on bailing out the Big Three Detroit automakers, but 500 of their 1,700 direct suppliers are at "high risk" too, according to the Washington Post. In today's auto industry, suppliers provide about 70 percent of the value in a car and employ 673,000 people. The Big Three employ 239,000 according to the Bureau of Labor. So while billions of dollars are going to help keep the Big Three afloat, what happens if their supply chain fails? Auto manufacturing would basically shut down in this country. And now comes news that the auto suppliers are getting their own $5 billion bailout.

Thomas Klier, a Fed economist, wrote about auto industry suppliers, "If you want to save the auto industry, you can't just save the car makers. Think about it like an iceberg. What's above the waterline is the automakers -- that's what we see. But what's below the waterline is the suppliers, and it's much, much bigger."