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Auto Suppliers Seek Their Own Bailout
Trade groups warn industry could collapse from bottom up as Big 3 troubles filter down
By Rob Quinn
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Posted Feb 26, 09 2:12 AM CST
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(Newser)
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The auto industry is warning that it could collapse from the bottom up if the government doesn't immediately assist America's car parts suppliers, the Washington Post reports. Suppliers are struggling to use their unpaid billings to troubled automakers—usually 45 to 60 days behind deliveries—as collateral for operating loans, and may soon go under. "We're on the cusp of what could be cataclysmic," said an industry analyst.
Trade groups have met with the administration's task force to ask for help, and subcontractors further down the supply chain are trying to get the ear of lawmakers. One proposed rescue plan would create a "quick-pay" program to cut the delay in payments to 10 days, although GM execs say they would prefer it if the government agreed instead to guarantee that the billings will be paid.