Auto parts makers in talks with feds

Saturday, February 7th, 2009
Author : contributing writer

Automakers may be grabbing the lion’s share of the headlines, but U.S. auto parts suppliers that feed the industry are hurting just as bad.

And now they, too, are looking to the federal government for help.

U.S. auto parts suppliers are in discussions with the Treasury Department about ways to address their financial troubles, industry trade groups said in a Feb. 4 Associated Press story.

However, no formal request for financial help has been made and no dollar amount has been requested, according to a joint statement by the Motor Equipment and Manufacturing Association and the Original Equipment Suppliers Association, the AP said.

Earlier media reports said suppliers were seeking roughly $20 billion in aid, with representatives from one trade association, the Original Equipment Suppliers Association, offering conflicting information. In one interview with the AP, Dave Andrea, vice president of industry analysis and economics for the group, said there had been no formal request to the feds. At the same time, trade publication Automotive News cited Neil De Koker, president of the Original Equipment Suppliers Association, in reporting that suppliers were asking Treasury for $10 billion in direct loans and another $10.5 billion through the Detroit Three automakers, the AP said.

No comment from the Treasury Department.

“Auto parts suppliers have been battered by the downturn in the auto industry as vehicle demand collapses and automakers slash production. Last week, American Axle & Manufacturing Holdings Inc., Lear Corp., Gentex Corp. and Autoliv Inc. all reported net losses for the fourth quarter,” the AP reported, adding this quote from supplier groups:

“Many suppliers have minimal cash flow coming in and very few options to remain viable.”


Biz2Credit Logo This article was submitted by Kathleen O’Connor, a contributing writer for Biz2Credit. Biz2Credit is a small business marketplace that provides entrepreneurs with the latest industry news and financial advice. Send all questions to info@biz2credit.com.

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