UPDATE: US Auto Suppliers To Press For Up To $10 Billion In New Aid
June 09 2009 - 12:20PM
Dow Jones News
U.S. auto-parts suppliers plan to ask the Obama administration
for up to $10 billion in new aid to forestall an industry crisis
brought on by the bankruptcies of General Motors Corp. (GMGMQ) and
Chrysler LLC.
Supplier trade groups plan to propose several new aid programs
totaling between $8 billion and $10 billion, said Ann Wilson, of
the Motor and Equipment Manufacturers Association. More details
were expected later Tuesday, and a proposal could be formally
presented to the Obama administration this week.
"We have an immediate crisis that needs to be addressed," Wilson
said.
Suppliers, already hurt by the downturn in auto sales and
broader recession, are facing a deeper crisis because of the idling
of plants and slowdown in production associated with the
bankruptcies of GM and Chrysler.
Visteon Corp. (VSTN) and Metaldyne Corp. filed for bankruptcy
protection last month. Lear Corp. (LEA) and TRW Automotive Holdings
Corp. (TRW) are attempting to reach new agreements with their
creditors by June 30.
The Treasury Department created a $5 billion program this year
to help the supply base by guaranteeing GM's and Chrysler's
payments to suppliers. But supply groups have maintained the aid is
far smaller than they need. An Obama administration official said
the Treasury Department's auto industry task force planned to meet
Wednesday but couldn't confirm whether auto suppliers would be
present.
"We will continue to work with the companies and monitor the
auto supply base going forward," the Treasury Department said in a
statement.
Suppliers account for more than three-quarters of auto sector
employment in the U.S., according to a Chicago Federal Reserve
study, with staffing estimated at around 600,000 across the
industry.
-By Josh Mitchell, Dow Jones Newswires; 202-862-6637;
joshua.mitchell@dowjones.com
(Jeff Bennett in Detroit contributed to this article.)