Tufast· Premium Member
Discussion Starter · #1 ·
Filed under: Government/Legal, Earnings/Financials
Auto suppliers are in a perilous position, which isn't surprising considering that their livelihoods are directly tied to those of the major automakers, and we all know how that's been going lately. To help keep their ships afloat, a team of 35 execs from the largest suppliers has crafted a plan asking for $10 billion in loans from the government. Nowadays, assembling an automobile is like a giant jigsaw puzzle, and bits come from all around the globe from thousands of possible suppliers. As it currently stands, these parts suppliers are paid on a 45-day cycle, but that's not going to be good enough to keep many of them from bankruptcy as auto sales in December were horrid nearly across the board, and January sales aren't going to be any better.
Instead of receiving the money directly from the Feds themselves, auto suppliers are asking that the funds be dispersed to the automakers, who would then in turn pay the suppliers on a 10-day cycle for parts delivered. The only problem with this plan, though, is that Chrysler and General Motors still need to submit business plans to Congress on February 17th that detail their path to viability - or else they'll need to give their lifeline back, which would likely send both the automakers and many of their suppliers spiraling towards bankruptcy