DETROIT (June 16, 2009)—The U.S. auto task force has shot down suppliers' request for $8 billion to $10 billion in additional federal aid, said Neil De Koker, president of parts trade group Original Equipment Manufacturers Association in Troy, Mich.
De Koker said that he was told by task force adviser Ron Bloom suppliers wouldn't get anything beyond the $5 billion committed through a U.S. support program to help speed payments for parts already delivered.
In addition, the Treasury has already assisted suppliers indirectly with billions of dollars of loans to Chrysler L.L.C. and General Motors Corp., Bloom told OEMA and supplier representatives at a meeting last week.
Bloom and other task force members said the restructuring in the industry has been orderly and they would revisit the idea of more aid if parts shipments to the auto makers are jeopardized by widespread supplier bankruptcies or liquidations, according to De Koker.
A Treasury Department source said the situation is being closely monitored.
Moreover, hundreds of suppliers are participating in a $5 billion Supplier Support Program that Treasury established to help suppliers get paid quicker for parts already delivered, De Koker said in a letter to association members June 15.
Suppliers say they need more aid to weather months of sharply curtailed production by Chrysler and GM. The bankruptcy shutdown by Chrysler and rolling plant closings by bankrupt GM will leave suppliers with minimal payments due in July when the two car makers are expected to ramp up production again.
De Koker said the OEMA will continue to work with the Senate and House auto caucuses for help.
His organization would try to convene a group of private bankers to see if more loans could be made available to the industry and keep working capital available through a couple more tough months of business, he said.