15 July 2009 | Allie Anderson
Thousands of car parts suppliers have appealed to the European Union (EU) to set up a ?3 billion (£2.76 billion) fund to fast-track payment owed to them by manufacturers.
The European Association of Automotive Suppliers (CLEPA) - with more than 3,000 members in Europe - is pushing for the cash injection to supplement the freeze in lending by commercial banks.
The proposed system would mean when a carmaker receives an invoice from a supplier, they would forward it to a central EU-funded agency. Payment would be made directly by the agency to the supplier, and the carmaker would settle the bill with the EU body at a later date.
Speaking to the Wall Street Journal, CLEPA chief executive Lars Holmqvist said that on average, carmakers delay payment for 90 days. He argued that up to 800 automotive suppliers face "acute liquidity problems" and must be paid quicker.
Holmqvist endorsed the European Investment Bank as a potential candidate for running the scheme and said three commercial banks are keen to be involved.
CLEPA met with delegates from EU member states and agencies to discuss the plan in Brussels last week. EU representatives said they would discuss the proposal with their respective governments. Holmqvist hopes a decision can be made shortly.
It follows a similar plea made in the US, where auto suppliers requested $10 billion (£6 billion) in government aid last month (Web news, 12 June 2009).