Auto suppliers lobby for federal support
WASHINGTON — Auto suppliers appealed to lawmakers Wednesday for federal support, warning that the U.S. supply base could buckle under from the declining fortunes of General Motors Corp. and Chrysler LLC.
But it’s not just the big Detroit automakers that are suffering. Several small auto suppliers, which manufacture tooling, plastic molds and metal castings for cars and trucks, said during a congressional hearing that Chrysler’s bankruptcy has left them in limbo, with some awaiting payment for millions of dollars worth of parts.
If General Motors is forced into bankruptcy, they said some suppliers could be forced to shut their doors, undermining an industry that employs more than 3 million workers.
“Strengthening and supporting small firms will be critical. Failure to do so will shrink the supplier base further, dealing a lethal blow to businesses like GM and Chrysler,” said Rep. Nydia Velazquez, D-N.Y., chairwoman of the House Small Business Committee.
Several suppliers said they would be left vulnerable by Chrysler’s decision to idle all of its plants in the U.S. until it completes its sale to Italian automaker Fiat Group SpA. GM, which faces a June 1 deadline to restructure or file for bankruptcy, has already announced plant closings and extended shutdowns this summer.
“A recovery plan for Chrysler and GM is simply not viable unless it takes into account the entire automotive supply chain,” said Chris Norch, president of Denison Industries, a metalcasting company that employs 125 workers in Denison, Texas.
The Treasury Department recently launched a $5 billion financing support program to provide government guarantees for financing auto parts. The program was meant to help larger, so-called “Tier 1″ auto suppliers keep parts flowing to GM and Chrysler.
But the small business owners, many employing 100 to 200 workers, said the program was well-intentioned but has yet to reach smaller companies down the supply chain.
“The government should help open the faucet because the only thing trickling down right now are pink slips,” said Ron Overton, CEO of Overton Industries, a Mooresville, Ind., tool and die company.
The suppliers said the government should make some of the supplier aid available to smaller companies and suggested that expanding loan programs through the Small Business Administration could help.
Others urged the Obama administration to make available funding from a $25 billion loan program to help the auto industry retool plants to build more fuel efficient vehicles. The Energy Department has received more than 100 applications for funding but has yet to announce awards.
As it stands, small suppliers are “highly unlikely” to qualify for the loan funding, said Wes Smith, president of E&E Manufacturing Co. Inc., a Plymouth, Mich., supplier of stamped metal parts.
Related News
Auto parts suppliers ask Obama to find new ways to help ailing their sectorAugust 27th, 2009 Auto parts suppliers ask Obama for more helpWASHINGTON — An auto parts industry association is asking President Barack Obama to consider new ways to help the industry, which is facing a spike in bankruptcies due to the woes of U.S. automakers. In a letter to the White House Wednesday, the Motor & Equipment Manufacturers Association wrote that there was "insufficient capital" available for parts suppliers to rehire workers and acquire raw materials for a possible increase in vehicle production later this year.
Production cuts, bankruptcies at GM and Chrysler make for tough quarters for suppliersAugust 6th, 2009 Automakers' shutdowns drive suppliers' 2Q lossesNEW YORK — With global auto production still in a slump and two of the U.S. automakers in bankruptcy protection, it wasn't a big surprise that the second quarter was another tough one for auto suppliers.
Task force chief Bloom says government won't use stakes in automakers to make social policyAugust 5th, 2009 Task force head says gov't won't run automakersTRAVERSE CITY, Mich. — The U.S.
Obama administration rejects request from auto suppliers for up to $10 billion in aidJune 16th, 2009 Administration rejects auto supplier aid requestWASHINGTON — The Obama administration has turned down a request by auto suppliers for up to $10 billion in additional federal aid to help the parts companies deal with the bankruptcies of General Motors and Chrysler. The Treasury Department said in a statement Tuesday that an existing $5 billion support program for auto parts suppliers was playing an important role in stabilizing the nation's auto supply base.
Auto parts suppliers survive with government and automaker help, but more trouble in sightJune 15th, 2009 Government, automaker aid keeps parts makers aliveDETROIT — Government aid and timely payments by General Motors, Ford and Chrysler have held off the predicted collapse of the nation's auto parts supply base, but industry officials say more bankruptcies are coming as the effects of Detroit's temporary factory closures continue to ripple through the economy. Hundreds of companies large and small across the country make everything from bolts to axles to transmissions, shipping them to Detroit Three factories as well as those of foreign automakers with U.S.
Strapped auto supplier groups to ask government for up to $10 billion in new loan guaranteesJune 10th, 2009 Auto suppliers to seek billions more in gov't aidNEW YORK — Automotive parts suppliers plan to seek an additional $8 billion to $10 billion in loan guarantees to help them weather a bleak auto sales environment and the bankruptcy court restructuring of major customers GM and Chrysler. The Original Equipment Suppliers Association and Motor & Equipment Manufacturers Association said they plan to request the federal aid Wednesday from the U.S.
Auto suppliers to request $8-$10B loan guarantees as companies struggle with falling revenueJune 10th, 2009 Auto suppliers to seek $8-$10B in loan guaranteesNEW YORK — Struggling automotive parts suppliers plan to ask the U.S. Treasury Department for $8 billion to $10 billion in loan guarantees to help support their operations.
Auto suppliers want Congress, Obama to protect supply base amid summer factory shutdownsMay 9th, 2009 Auto suppliers urge lawmakers to protect baseWASHINGTON — Auto suppliers say the auto industry's supply base could be threatened by factory shutdowns by General Motors and Chrysler. In a letter to congressional offices on Friday, the Motor & Equipment Manufacturers Association said the supplier industry is in crisis and during the shutdowns many suppliers will have no choice but to permanently close their facilities this summer.
Chrysler Financial to immediately stop dealer wholesale financingMay 2nd, 2009 Chrysler Financial to suspend dealer financingFARMINGTON, Mich. — Chrysler Financial says it's temporarily suspending financing for Chrysler dealers effective immediately.
Japan minister wary of fallout from Chrysler bankruptcy on auto parts makersMay 1st, 2009 Japan wary of Chrysler fallout on parts makersTOKYO — Japan's trade and economy minister said Friday that the government is watching for possible fallout from Chrysler's bankruptcy caused by damage to Japanese parts makers. "We must take appropriate measures if they are being hurt," Economy, Trade and Industry Minister Toshihiro Nikai told reporters.
Chrysler's Canadian plants close indefinitely while parent company restructuresMay 1st, 2009 Chrysler's Canadian plants halt productionTORONTO — A parts shortage resulting from Chrysler's restructuring under U.S. bankruptcy protection has forced the company's Canadian branch to halt its assembly operations indefinitely, a spokeswoman said Friday.
UAW overwhelmingly ratifies Chrysler settlement, Fiat commits to make small car at US plantApril 30th, 2009 UAW overwhelmingly ratifies Chrysler settlementDETROIT — Members of the United Auto Workers have overwhelmingly ratified a settlement deal with Chrysler on Wednesday night. The UAW says 82 percent of production workers and 80 percent of skilled-trades workers voted for the agreement in balloting that took place at UAW Chrysler locations throughout the U.S.
Chrysler forced to close plants early as some suppliers stop shipping partsApril 30th, 2009 Some Chrysler parts suppliers stop shippingDETROIT — Chrysler says it has sent workers home from at least two factories because parts suppliers have stopped shipping due to its bankruptcy filing. Vice Chairman and President Tom LaSorda said in a conference call Thursday that workers were sent home from stamping and assembly factories in the Detroit suburb of Warren.
Canadian Auto Workers union says it's hopeful a deal with Chrysler CanadaApril 24th, 2009 Canadian union says deal near with ChryslerTORONTO — The Canadian Auto Workers union says it is close to agreement on a deal with Chrysler Canada. CAW spokeswoman Shannon Devine says she is hopeful a deal will be reached late Friday afternoon.
GM, Chrysler vehicle buyers get government warranty in CanadaApril 8th, 2009 TORONTO - Canada Tuesday followed the US in unveiling its own package to back warranties for vehicles sold by the sinking General Motors and Chrysler in a bid to calm buyer fears. The government will spend about $185 million under the warranty plan for the auto sector which is the backbone of the Canadian economy and employees hundreds of thousands of people.
Loading ...