Bailout Watch 578: PTFOA Chief Ron Bloom: "No Supplier Bailouts. Unless There Are"

Robert Farago
by Robert Farago
bailout watch 578 ptfoa chief ron bloom no supplier bailouts unless there are

Oh, to be the head of the Presidential Task Force on Automobiles (PTFOA). First, you have to pretend that you’re not running not one but two nationalized American automakers. Hands-on, hands-off, hands-on! Next, you have to beat off failing automotive suppliers with a baseball bat (so to speak). Automotive News [sub] reports that PTFOA jefe Ron Bloom told their Management Briefing Seminar that bankruptcy-bound suppliers get bupkis. But “We’re keeping a very close watch on the supply base.” That said, Bloom’s leaving such mission critical issues to the titular heads of GM and ChryCo—unless supplier meltdowns should suddenly be deemed a “core issue.” In which case, “If we felt it necessary, we might consider something.” But “at the moment, we don’t see that happening.” So it’s sink or swim, until they start to sink. Huh?

[Bloom] reiterated the Obama administration’s position that some supplier attrition is necessary to bring factory capacity closer to vehicle demand.

“You can’t maintain a supply base for 17 million cars when you’re not selling 17 million cars,” he said.

So United Auto Workers employees get shares, buyouts and job protection. Suppliers get, as the Brits say, sweet FA. Well, other than the increased business triggered by the Cash for Clunkers program. (Try planning cash flow for that action.) Until they do.

Neil De Koker, president of the Original Equipment Suppliers Association in suburban Detroit, said a crisis may be as close as 60 to 90 days.

The chief of the trade association said that up to a quarter of the 4,000 North American parts companies are distressed financially.

As my father is wont to say, how much is this boondoggle gong to cost me?

He said the component industry needs about $8 billion to $10 billion in additional government aid. He said he would like to see the aid in the form of government guarantees for private bank loans to suppliers.

That’s atop a little-used $5 billion federal program that allowed select GM and Chrysler suppliers to pay a 2 percent fee to get their parts payments quicker or 3 percent to guarantee payments against a GM or Chrysler bankruptcy. The fast-pay part of the program continues.

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  • Star_gazer Star_gazer on Aug 06, 2009

    From today's Kokomo Tribune, Delphi will get $89 Million: Delphi Automotive Systems LLC, Kokomo, was one of six Indiana companies designated to share almost $400 million of the grant funding, a fact that apparently took even Delphi officials by surprise. U.S. Rep. Joe Donnelly, D-Granger, received word of the pending Delphi announcement Wednesday morning, shortly before the president’s noon speech in Wakarusa. Donnelly, who voted in favor of the $787 billion stimulus package, said the grant could be the beginning of a renaissance at Delphi, which has shed thousands of local jobs this decade. “I voted for the stimulus, and this is why I voted for it. All the folks who say nothing’s happening ... now $90 million has come to Kokomo for long-term growth,” Donnelly said.

  • Stunned_BB Stunned_BB on Aug 06, 2009

    So now Obama is just going to start sending buckets of front money to buy the votes that he needs for Obamacare? Sheesh!

  • Kcflyer How about, "Fancy VW"?
  • Kcflyer Would be very interested, despite the 4 banger, if not for the direct injection garbage.
  • Wayne back in 55 when I was 10 Grandpa started with 'back her out' of the garage, then on day he crawls into the passenger side and say's take her to the post office. teach them early as you can
  • 28-Cars-Later Another: How does Stellantis plan to leverage the EV experience of PSA and Opel (?) against the former FCA operation?
  • Ltcmgm78 We bought a 2017 Volt when it came off lease. What a great car! Cost us $18,000 to buy. We put gas in it a couple of times a year. GM blew it with this car as they have done with others. No buyer education. This should have been the bridge car between pure ICE vehicles and pure battery vehicles. No range anxiety at all. And ours still gets 44 mpg running the gas "generator" to power the electric motor. We love it and wish a new model would return to market.