WASHINGTON (Nov. 19, 2008) — Congress must pass legislation immediately to provide direct financial assistance to the auto industry and its parts suppliers, according to James McElya, chairman of Cooper-Standard Automotive Inc.
Testifying on behalf of the Motor & Equipment Manufacturers Association, McElya appeared Nov. 18 and 19 at Senate and House committee hearings, along with the heads of Detroit's Big Three auto makers, United Auto Workers President Ron Gettelfinger and Annette Sykora, chairman of the National Automotive Dealers Association.
U.S. auto makers and suppliers are faced with two related and dangerous problems, McElya said.
“First, a potential bankruptcy of a major automobile manufacturer will cause a chain reaction of unpaid payables with subsequent additional bankruptcies,” he said. “Secondly, on a parallel course, is the inability of the automotive supplier industry to get sufficient working capital from its traditional sources to function.
“Addressing these issues with funding is not a bailout,” McElya said. “Rather, it provides companies with urgently needed access to capital so that they can reinvest in our nation's communities.”
The automotive and auto supplier industries hope to obtain funds from the $700 billion in bailout funds Congress approved last month to help the financial services industry. However, the outgoing Bush administration and many Senate Republicans remain opposed to such an action, as do small business organizations such as the National Federation for Independent Business.