Next in the bailout line: Auto parts suppliers
By TOM KRISHER and KEN THOMAS – 1 day ago
DETROIT (AP) — Saving the U.S. auto industry will take more than bailing out GM and Chrysler. It also hinges on companies like FormTech Industries, which employs just 440 people and forges steel for parts under the hoods of cars and trucks.
And now those suppliers are asking for a bailout of their own.
Two major parts supplier groups are expected to make a formal request as early as Friday for a government loan of up to $25.5 billion to stay afloat, putting the auto industry back at the front of the seemingly unending bailout line.
"You can't just provide support for the manufacturers, which I hope we do, and then see the suppliers go under," said Sen. Carl Levin, D-Mich. "It takes both parts to hold up the industry."
So far, federal help for the auto industry has been confined to General Motors Corp., Chrysler LLC and their financing arms. GM and Chrysler have to turn in plans by Tuesday showing the government how they plan to restructure and turn profits.
For the parts suppliers, which have been scraping by for years, the automakers' own efforts to survive by shutting down their assembly plants for long stretches have only made things worse.
In the coming weeks, the suppliers expect to see their revenue all but disappear.