Email List Sign Up

Suppliers request $20.5 billion in U.S. emergency aid

Suppliers request $20.5 billion in U.S. emergency aid
 



David Barkholz
and Robert Sherefkin

Automotive News | February 4, 2009 – 3:24 pm EST

 

U.S. auto parts suppliers are asking for up to $20.5 billion in federal aid to survive the worst industry downturn in decades.

Suppliers are requesting $10 billion in direct loans from the Treasury Department, said Neil De Koker, president of the Original Equipment Suppliers Association in suburban Detroit.

They also are asking for an additional $10.5 billion that will flow through the Detroit 3 so that suppliers can be paid in 10 days for parts delivered instead of the traditional 45.

Suppliers are starving for cash as they confront first-quarter North American production cuts of more than 40 percent and a 66 percent plunge in January. De Koker estimates that hundreds of parts makers will close or file for Chapter 11 protection without immediate aid.

The federal government already has pledged $24.9 billion to General Motors, Chrysler LLC and their captive finance companies; earmarked another $25 billion for supplier and automaker plant retooling; and committed funding to free up credit for consumer loans, including those to vehicle buyers.

The suppliers made the Treasury request through the Motor & Equipment Manufacturers Association, De Koker said. The request was delivered to Treasury officials Sunday, Feb. 1, he said.

Need ‘fast pay’ assistance

For the direct loans, suppliers individually will have to apply for the money. But the association wanted to give Treasury some sense of how much money will be needed for suppliers, De Koker said.

The $10.5 billion “fast pay” part of the request will help suppliers bridge what they typically receive for parts delivered and the shortfall caused by production cuts, De Koker said.

The Detroit 3 typically spend about $15 billion a month for parts, he said. That figure will be more akin to $5 billion to $7 billion a month in February and March, he said.

U.S. auto sales fell 37.1 percent to 656,881 units in January, the lowest total for any month since 1981.

The request for the $10.5 billion portion was reported earlier by Bloomberg News.

Share
Seniority Lists
Recent Posts!
Bargaining Committee

Chairman
Mike Herron
President
Tim Stannard
Zone at Large – 1st
Danny Taylor
Zone at Large – 2nd
Mark Wilkerson
Committeepersons
Joe McClure
Chad Poynor
Steve Roberts
Derek Lewis
Bill Cundiff
Kirk Zebbs
Don Numinen
Jay Minella
Danny Bragg
Chris Hill
Rashad Thomas
Keith Oswald
Chris Brown

1853 Officers

President
Tim Stannard
Chairman
Mike Herron
Vice President
Darrell DeJean
Financial Secretary
Mark Wunderlin
Recording Secretary
Peggy Mullins
Trustee (3)
Jay Lowe
Dave Clements
Dave Spare
Sgt. at Arms
David C Spare
Guide
Ashley Holloway
E-Board at Large (2)
David Ryder
Steve Roberts
GM Unit Chair
Mike Herron
Voith Unit Chair
Larry Poole
Ryder Unit Chair
Patrick Linck
AFV Unit Chair
Neil Osborne
Retiree Chair
Mike Martinez

Get Text Alerts



asdasdsd

*Standard text messaging rates may apply from your carrier