Bailout Watch 362: Auto Suppliers Seek $10b
Holy printing press Batman! Those are some serious spondoolies! Or are we at the point now where $10b worth of federal largess for the U.S. auto industry is just another day at the office? Automotive News [AN] sure seems non-plussed. “The companies will ask for the loans to be funneled through the Detroit 3 so suppliers can be paid in 10 days for parts delivered instead of the usual 45 days, said Neil De Koker, president of the Original Equipment Suppliers Association in suburban Detroit. The association also will ask the Treasury Department to guarantee certain supplier receivables so parts makers can use that owed money to borrow the working capital they need to operate, De Koker said.” So Uncle Sam loans $10b to companies to supply automakers to whom we’ve already loaned $13.4b, who aren’t selling Jack at the moment, whose “viability plans” have yet to be scrutinized. Makes sense to De Koker, ’cause “without government help, hundreds of suppliers might close or be forced into Chapter 11 bankruptcy protection.” What happens when all these companies are in default of their federal loans?
Soon the suppliers of the suppliers will need money. This is never going to end.
@ snafu: You information is not correct (can't say much more than that - sorry). This sounds like more of a bailout for the OEMs than it does for the supply base.
I coulda used the cash before we got a headcount reduction.... Where's my bailout?
paid in 45 days? Wasn't it more like 6 months if i remembered an TTAC article correctly