US suppliers need between US$5bn and 10bn in government aid to survive a “cash crisis” in the next few months, a top executive has said.
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Dura Automotive Systems CEO Tim Leuliette said at the Automotive News World Congress in Detroit the sector faces severe borrowing issues in February and emergency government funding is critical to support the industry’s short-term liquidity needs.
“Financing is drying up. We find financing institutions not wanting to work with automotive. Banks wouldn’t return your calls,” Leuliette said, according to Reuters.
Big production cuts at almost all automakers in the United States mean suppliers should receive $5bn to $7bn in payments for parts in February, down from the usual $12bn to $15bn, Leuliette said.
“That cash is gone. And suppliers need this liquidity … It can be TARP [federal bailout fund] money; it can be anything you want,” Leuliette said, adding: “We’re talking $5-10 bn.”
According to Reuters, he said Dura had so far laid off 3,500 workers and stood down all remaining staff for a week this month.
“We can’t just keep people hanging around waiting, so unfortunately we’re all taking these actions. When your customers are down, you just have to shut it down.”
