US automakers’ efforts to get federal assistance to help them through the current period of financial turmoil and flagging sales are expected to resume an urgent pace after Tuesday’s elections, a Detroit newspaper said. Meanwhile, parts makers have joined the automakers – and dealers – seeking help from the government.
General Motors, eyeing a merger with Chrysler, is still seeking federal assistance but none is likely before both it and Ford publish their third-quarter losses and cash flow, a “person familiar with the situation” told the Detroit Free Press.
GM and Ford are due to post third-quarter earnings on Friday.
The federal government has been reported widely as unwilling to help bankroll the GM-Chrysler merger (GM reportedly has asked for $10bn) expected to cause tens of thousands of job losses (up to 40,000 has been suggested) so the automakers are now trying to speed up receipt of funds from the US Energy Department’s US$25bn low-interest programme, the Free Press said.
Meanwhile, in a letter sent to President Bush, the Motor & Equipment Manufacturers Association (MEMA) urged the acceleration of the $25bn loan programme for motor vehicle manufacturers and parts suppliers to meet increased fuel efficiency requirements. The letter also called for the president to establish a loan guarantee programme specifically for the parts supplier industry as part of the Troubled Asset Relief Programme (TARP).
“Without improved credit availability for the industry, we risk significant losses to motor vehicle demand, employment, and component and material production capacity,” said MEMA’s president and CEO Bob McKenna.
“Parts suppliers are the nation’s largest manufacturing sector and the top manufacturing employer in seven states. These losses will impact the lives of all Americans and we hope to work with the administration to address the serious economic challenges before us.”
MEMA said motor vehicle suppliers employ 783,100 in the United States and contribute to 4.5m domestic jobs. Suppliers provide 70% of the content of US-built cars and trucks.
The Free Press said MEMA’s appeal now means that all three sectors of the industry – automakers, retailers and parts makers – have now pressed the energy department to move quickly on the loans.
While energy officials have said it could take 18 months for the money to reach the industry, auto industry officials say the administration has sped up the process, and hope to see some loans made early next year, the paper added.