With all of the commotion surrounding the domestic automakers, it’s easy to forget about others in the auto industry that are facing hardships. Among them are auto parts suppliers, which are now asking the federal government for $22.5 billion in financial assistance.
Both the Motor & Equipment Manufacturers Association and the Original Equipment Suppliers Association have pressed the U.S. Treasury for help. Their request for a loan ensures that the parts suppliers will be able to pay their bills quickly and assist in the turnaround of the automotive industry. The breakdown of the loan request includes money for loans taken out against invoices payable by domestic automakers, money for commercial loans, and additional funds to enable General Motors and Chrysler to pay their suppliers more quickly. While the request is far reaching, one Toyota dealer Tustin believes it’s absolutely necessary to maintain momentum and help the industry weather the current economic crisis.
With auto sales down about 36 percent from a year ago, Monroe Toyota dealers stress that all automakers are dramatically scaling back production. As a result of fewer cars being build, auto parts suppliers are hurting more than ever. Toyota parts and Toyota accessories providers also warn that the ripple effect of the struggling automakers is now affecting the entire industry.
Already more than 40 auto parts suppliers have fallen into bankruptcy and more are in “imminent financial distress” according to the Motor & Equipment Manufacturers Association. Meanwhile, Hyundai Parts Stores say more suppliers are expected to fall into bankruptcy this year. With the entire industry now feeling the effects, Maine Ford dealers feel things may get worse, before they get better.
The auto parts industry employs about 600,000 people, which puts plenty of jobs and households in potential financial peril. As jobs are cut at GM, Ford, and Chrysler plants, Anaheim Toyota says that many other jobs are ultimately lost among parts suppliers.
With credit evaporating, the auto parts suppliers are increasingly in need of cash, especially in light of the automakers’ struggles, says Detroit Chevrolet dealers. With outstanding invoices and the fate of GM and Chrysler in question, auto parts suppliers are looking for a solution that will help save the industry from falling apart. Continue reading ‘Auto Parts Suppliers Seek $22.5B in Federal Aid’
