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TRW Troy Resources Limited

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UPDATE: US Auto Suppliers To Press For Up To $10 Billion In New Aid

09/06/2009 5:20pm

Dow Jones News


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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.)

 
 

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