Although the Bush Administration announced a bailout package for the Detroit automakers earlier on Friday, not all in the auto community are satisfied. Automotive suppliers are now saying that they are in desperate need of government funding, with many claiming to be on the brink of collapse.
Some of the $17.4 billion set aside for Chrysler and General Motors will undoubtedly end up in suppliers’ pockets, but suppliers are saying that just isn’t enough. “The next critical phase is the supplier community, which is facing the exact same financial crisis as the manufacturers,” Neil DeKoker, CEO of the Original Equipment Suppliers Association, told Automotive News. “We’re requesting assistance from the presidential transition team.”
The biggest complaint by automotive suppliers is that they just don’t have the same access to capital they once did. Suppliers traditionally use their accounts receivables from automakers as collateral against working capital, but with the poor state of the Detroit automakers, banks are no longer accept AR as a form of collateral.
Suppliers are also feeling the collapse of the new car market as most automakers – including Chrysler, Ford, General Motors, Toyota and Honda – are cutting back production.
But even if there is a desperate need for a supplier bailout, there likely isn’t enough support in Washington to get a deal hammered out. The Big Three had a tough enough time convincing the government to fund a bailout package, some of which will eventually wind up on the supplier level. All in all, it looks like tough times are ahead for the country’s auto suppliers.



12/19, 4:33 PM
posted by:
Lariat Luxury Locomotive Liner No.3
Let floodgates open and part the green sea of money! Taxpayers money that is…so he loaded up the truck and he moved to Beverly. As an automotive enthusiast I have been affected and need money for those additional vehicle options that I so direly want. Where can I stand in line for my enthusiast bailout? I am in desperate need here dammit, it’s the holiday season!
12/19, 4:34 PM
posted by:
Captain Crunch
Get the hell out of here! I should beg the government for money as reimbursement for all the money I had to spend in the past to keep the American crap I used to drive alive.
12/19, 4:37 PM
posted by:
Veni Vidi Vici
+1 Captain
12/19, 5:05 PM
posted by:
Borat
Party begun! I think war in Iraq was a cheap foreplay. As newly elected president pointed: we don’t need big or small government, we need smart government. That means extremely big and expensive government.
12/19, 5:45 PM
posted by:
F3INT))AP3X
“The biggest complaint by automotive suppliers is that they just don’t have the same access to capital they once did.”
Welcome to the world as we now know it suppliers; nobody has access to the same capital they once did and everyone has had to live with that for a little while now Jesus H these guys are a bunch of f***king retards wayyy behind the times. How can legitimate businesses that have been around for awhile be so god damn stupid that they don’t realize nobody has any god damn money.
12/19, 6:08 PM
posted by:
terk184
And on the 8th day Bush created the bailout, and they came from all corners of the earth seeking funds, and Bush looked upon the throngs while his minions tossed them money, and he said it was good…
12/19, 7:46 PM
posted by:
DetroitWatcher
GM and Chrysler now have $17 Billion, so the banks should be more than happy to accept accounts receivable as collateral. Not to mention the fact that they (banks) are flush with close to $350 Bil. in taxpayer dollars. Stop the insanity!
12/19, 8:17 PM
posted by:
Lionwithoutpride
Veni Vidi Vici . . . great name, but I still prefer Veni Vini Vidici (for those who are wondering why I am a crackhead . . . vidici is “slept”).
12/19, 8:21 PM
posted by:
Lionwithoutpride
There is a way around this . . . Toyota and Honda (which are only barely losing money) invest in the suppliers and Ford and GM can borrow money from Toyota and Honda to do the same. Toyota and Honda’s incentive? Their execs have repeatedly said that they cannot allow American car companies to fail as it will destroy the supplier base. Ford and GM’s reason to buy into such a ponzi scheme? They will still have suppliers. Toyota and Honda are probably too smart for my shenanigans, but I can dream can’t I?!
12/19, 8:23 PM
posted by:
Lionwithoutpride
p.s. Yeah, I know I spelled Vini wrong in my first post (I just finished my last exam . . . cut me some slack).
p.p.s. I know you’re all tired of my messages. Unfortunately for you all, I’m not tired of writing them yet!
12/19, 9:46 PM
posted by:
fishsticks
They couldn’t even let the ink dry on the (American) automaker bailout?
Suppliers should live and die like any business.
12/20, 2:03 AM
posted by:
gstang71
Ford doesnt need the money.
12/20, 4:01 AM
posted by:
idrinorbarsaku
i kinda figured something like this would happen(and many other people did so also.) One place starts asking for money, then everyone else follows threatening for huge problems to the economy if they don’t get their undeserved millions. i say, f.uck them all. If they don’t have money, let them go out of business. let them be like a normal private business, which goes bankrupt if they run out of money. I keep on hearing talk about helping businesses out and what not from going bankrupt, but, when are the actual people going to get help. New Orleans is still A MESS!!! why not use some money to actually fix it up a little(or a lot). no matter what, not a single person deserves a bailout! you can give them money to cover up the wounds, but the scar runs deep! the problem will always remain there and never go away. I applaud FORD for not begging like gm and chrysler. I think they are heading in the right direction. as for gm and chrysler, i think they will burn up through their new bailout money in no time and will be back kissing a$$es real soon!
12/20, 4:09 AM
posted by:
idrinorbarsaku
my family doesn’t have access to the same capital that we once did, my student loan interest rates are unbelievable, and i have a credit score of 710 at age 21, but were not b!tch!ng about everything(yet)! I doubt there would be anyone(government side) aside from our family/relatives that would give 2 sh!ts about what happened to us and everyone else. now these companies are bitching about not having the same capital that they once did……..GO F.UCKING ROT IN HELL!! there’s a reason you don’t have capital, you don’t know how increase production rate while decreasing the amount of workers. the foreign market has mastered this skill and our companies don’t care a bit. we have unions that requires so much money…….
THINGS NEED TO CHANGE AND JUST GIVING THEM MONEY WILL HELP NOT A SINGLE PERSON, IT WILL JUST TEMPORARILY COVER UP THE PROBLEMS THAT ARE NOTICEABLE TO THE PUBLICS EYE!!!
12/20, 8:20 AM
posted by:
DeansterTJ
I need a bailout to support my coke habit which supports the dealers which in turn supports the auto industry and of course the rim and car stereo industry.
12/20, 8:44 AM
posted by:
Lionwithoutpride
Um, idrinorbarsaku-
I certainly do not know your finances, but if your student loans are through the government then the interest rates should be some of the cheapest you can find. It is usually only the private loans that have high interest rates. My tax law professor was crapping on all semester about how lucky we asl are to have student loans and that, aside from being insolvent students, most people would kill for access to government loans at the rates student borrowers get. Assuming you have government loans, you should be living off the largesse of the Fed. gov’t and your taxpayer parents, just as I am.
Frankly, I am not a fan of our even needing student loans. My theory is that schools know we have access to the money and end up inflating their tuition bills with the exception that we will just borrow the money from the gov’t (our parents as taxpayers). Anyway, I do not know your financial situation, but if you are getting government loans . . . ixnay on the accusitory-a re: govermentay largesse-a.
Anyway, Merry Christmas!
12/20, 11:17 AM
posted by:
idrinorbarsaku
Lionwithoutpride.
while your statement is 100% true, i guess this is something you don’t know, you need to be broke poor to get accepted into government grants/ low interest loans like the Federal Stafford Student loan. I applied for everything that i could to see my options and was really surprised when i got denied for the FSSL, FPL, FPL, however i got a couple arrangements made through Alternative Education Loans but the interest is at a whopping 11.5!! or at least i think thats a lot. IMO, education has turned into a pure business transaction! thats why you see all those technical institute out there who offer the same thing as a community college but charge half the price of a full 4 year college…they are not in it to educate you, they are in it to profit BIG! My girlfriend is getting the same degree(Bachelors of Science) that i am getting only oversees and shes not paying 10’s of thousands for education, no, she’s barely pushing 1 grand a year. It really kinda ticks me off how foreign schools offer far better education and yet costs unbelievably less!!! i don’t get pissed of at their schools, i get pissed at our schools. I think that if you are smart and have the will power to go to (my favorite place) MIT, you shouldn’t be stopped by your money issues. financial aid doesn’t even help enough at that point.
we got a letter stating that we got denied for the loans and it said right on there, your household income does not meet the requirements to be accepted into( it then listed everything we applied for that got denied). since then, I have talked to the financial adviser to see what can be done. they said if i go as an independent student (i don’t depend on my parents) then my income would fall into the acceptable limits. but this means i need to change a lot of things, and its WAYYY illegal to falsify that dependent/independent info. So i have been looking for my own place now:)
the same thing happened to my sister when she did her financial aid for this year at Ohio State U. i though that since my parents already have to pay for one child’s school, then the need would be greater for the second child trying to get gov. loans. It somewhat makes sense, but i guess it doesn’t frikin work that way.
12/20, 11:17 AM
posted by:
idrinorbarsaku
Merry Christmas to you too:)
12/20, 3:21 PM
posted by:
RaineMan
Now we see what happens when we start handing out free money… soon everyone wants some. It started with the bank bailout… and has now moved to the auto manufacturers… so now the suppliers want some too. At some point the govt. is just going to have to let some companies collapse… and the sooner we draw the line and say “NO MORE” the better it is going to be in the long run.
12/20, 3:41 PM
posted by:
idrinorbarsaku
two thhumbs up to RaineMan
12/21, 1:44 AM
posted by:
s2ktonv
Can we get some aid too??
12/21, 9:21 PM
posted by:
MOrtgagestar1
More government waste! The foriegn cars are of higher quality and affordable. Foriegn workers know which side of the bread is buttered. The UAW backstabbed the U.S. steelworker by fighting against illegal foriegn steel dumping. Since then many steel workers have boycotted th eAmerican unattractive pieces of scrap they call cars. Thier is simply NO market for these sorry a$$ cars. The UAW dictated lower quality and higher prices to feather thier nests. The UAW REFUSES to make concessions! Hope all those dirty corrupt union bosses get lynched by thier own workers for destroying the American marketIm buying a 2009 Honda Accord EX-L. Thier workers appreciate thier employers not like U.S. autoworkers. Wagoner would NOT answer Fox news on his pay. The hey with all of em!!
12/21, 11:44 PM
posted by:
elviososa
haaaaa….I said that before….and it happen now!