US car parts vendors ask for cash injection

9 February 2009

09 February 2009 | Jake Kanter

Automotive supplier groups in the US have held talks with the government to address the market's urgent need for finance.

The Motor & Equipment Manufacturers Association and the Original Equipment Suppliers Association (OESA) want financial support for their members to secure the long-term future of vehicle parts suppliers, to help firms escape an "onslaught of bankruptcies".

The groups have not submitted a formal request for support, but have held discussions with the Department of the Treasury, members of Congress and the Obama administration over securing credit.

"The interwoven relationships between parts manufacturers and carmakers, as well as the impact of these organisations on their communities, supplier bankruptcies will be disruptive to every automaker worldwide and costly to the already fragile US economy," the groups said in a joint statement.

They urged the government to ensure Chrysler and General Motors introduce quicker payment times after the companies received public funding through the Troubled Asset Relief Program (TARP). The two automotive companies received $13.4 billion (£9 billion) in government funding in December. The supplier organisations also called for direct access to the TARP money and for the introduction of a "car czar", a figure to help the industry through the financial crisis.

Neil De Koker, chief executive of OESA, said in a statement: "The failure of one or more key suppliers, large or small, can shut down entire supply chains."

SMfeb2009

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