In a report by David Barkholz and Robert Sherefkin for Automotive News, the president of the Original Equipment Suppliers Association, Neil De Koker, said early in the Obama administration suppliers would seek federal bailout guarantees of their own in order to be able to approach banks for loans of working capital.
Production cuts in the automotive industry have hit suppliers hard, but those companies, unlike General Motors and Chrysler LLC, have been weathering the economic crisis on their own, struggling against tight credit to find day-to-day cash, a situation that has left many "hanging on by their fingernails," said De Koker.
Suppliers, who routinely borrow against their receivables, expect the usual $13 billion per month on which they depend to be cut in half by production cuts by the Detroit Big Three. That projection may deteriorate even more on the news that General Motors lowered its industry wide sales projections in the U.S. on Thursday, January 15 to 10.5 million units, down from 12 million.
According to De Koker, supplier representatives met with U.S. Treasury Department officials on Wednesday, January 14, a meeting led by the Motor Equipment Manufacturers Association. In De Koker's own group, 54 CEOs and CFOs of member organizations indicated they were in serious enough straits to need federal assistance.