Bailout Watch 373: GM Pulls Supplier Tooling, Suppliers Ask for $20.5b Bailout

Edward Niedermeyer
by Edward Niedermeyer

Automotive News [sub] reports that General Motors pulled tooling from 50 parts makers during its winter shutdown. The pullout took place after GM was awarded $13.4b in TARP bailout money in December. GM spokesman Dan Flores reveals that one such supplier was metal stamping firm SKD, but refused to reveal other names. “Based on SKD’s financial distress and uncertainty, GM had to take action to protect our business interests,” said Flores. Hello? Pot? Kettle? Anyone? Bueller? But it’s all good in the hood. Remember folks, this is 2009. The worse the news, the bigger the bailout.

Remember when we told you the suppliers would be asking for $10b from Uncle Sugar? Automotive News [sub] now says that the suppliers will actually be requesting a cool $20.5b in direct Treasury loans. And like the GMAC bailout before it, some of that cash will be inexplicably funneled through the Detroit Three. $10.5b of it, to be exact. Why? So that suppliers can be paid in 10 days for parts delivered instead of the traditional 45, a necessary move in an industry where production will be about half what it was last year. Or so reckons the Motor & Equipment Manufacturers Association’s Neil De Koker. And if you’re asking for $10b, why not ask for a little more for your faithful partners in Detroit?

Edward Niedermeyer
Edward Niedermeyer

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  • Jerry weber Jerry weber on Feb 05, 2009

    And they said they couldn't go bankrupt because of all the bad press and turmoil it would create. Remember the Washington slogan; "who will buy a car from a bankrupt mfg?" Yes, and who will buy a car from a mfg. you couldn't begin to understand as to where it will be next year? Can you honestly buy a GM or Chrysler car and say, it will still be made next year? Then what is the difference between a legitimate bankrupcy to end all of the guessing once and for all, and what we have now?

  • Montgomery burns Montgomery burns on Feb 05, 2009

    So is this tooling going to end up in China? To help save American jobs?

  • Mel23 Mel23 on Feb 05, 2009

    There's lots of talk about bad bank / good bank. So how about we designate a bad car company. A major problem I see is a crowd in the front office. Wagoner, Lutz, Nardelli, it's endless. And I suppose the bad company would need a board of directors. Now we're talking real mobs. With the pro sports teams jumping from city to city as they con local governments into building them new complexes, maybe they could squeeze into one of these empty domes. As for good car companies; there won't be so many.

  • Anonymous Anonymous on Feb 05, 2009

    Don't worry, President Obama is going to fix this. Now with the Democrats also in control of the House and Senate the government will print trillions of dollars of new money and everybody will be rich. No need for people to work hard when you can just print money.

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