WASHINGTON, D.C. — Last week, the Motor & Equipment Manufacturers Association (MEMA) and its affiliate, the Original Equipment Suppliers Association (OESA), submitted a formal plan to the U.S. Department of the Treasury that outlined immediate actions needed to stabilize the increasingly deteriorating situation in the country’s supply base.
MEMA and OESA’s submission stated that a continued lack of available credit, severely reduced vehicle production levels and planned summer shutdowns relating to the GM and Chrysler bankruptcies are all contributing to the worsening financial state of the supplier industry.
The letter called for 1) expanding current federal loan guarantee programs, 2) developing incentives to spur commercial lending, including re-programming unused Auto Supplier Support Program funds, and 3) initiating the study of long-term program initiatives to support a stable U.S. automotive supply base.
The trade associations requested approximately $8 billion to $10 billion in financial support, which would be in addition to the $5 billion in financing set up for suppliers by the U.S. Treasury Dept. in March.
According to a report published yesterday by CNNMoney.com, that request has been turned down by the Automotive Task Force following two days of meetings with the trade groups. CNNMoney.com reported that a spokesperson for the Treasury said that while the request was not granted, the administration would continue to monitor the situation.
