February 25, 2009
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RELATED TICKERS: SRI
Too bad this stock is not rate-able it could easily rebound strongly.
Auto Suppliers like SRI could get a piece of $20B from FED.
NEW YORK (AP) -- U.S. auto parts suppliers are in discussions with the U.S. Treasury Department about ways to address their financial troubles, industry trade groups said Wednesday.
However, no formal request for financial help has been made and no dollar amount has been requested, according to a joint statement by the Motor Equipment and Manufacturing Association and the Original Equipment Suppliers Association.
Dave Andrea, vice president of industry analysis and economics for the latter group, declined in an interview to confirm media reports that suppliers are asking for as much as $20.5 billion in aid.
"We don't have a formal request in to the U.S. Treasury," Andrea said. "We have been in working discussions with them to scope out the ... problems with the supply base."
The trade publication Automotive News reported Wednesday that suppliers are asking Treasury for $10 billion in direct loans and another $10.5 billion through the Detroit Three automakers. It cited Neil De Koker, president of the Original Equipment Suppliers Association.
Treasury Department spokesman Isaac Baker declined to comment on whether the groups have asked for aid.
Auto parts suppliers have been battered by the downturn in the auto industry as vehicle demand collapses and automakers slash production. Last week, American Axle & Manufacturing Holdings Inc., Lear Corp., Gentex Corp. and Autoliv Inc. all reported net losses for the fourth quarter.
"Many suppliers have minimal cash flow coming in and very few options to remain viable," the supplier groups said.
On Tuesday, automakers reported that January car and truck sales in the U.S. plunged 37 percent to their worst level since June 1982. Some of the biggest year-over-year declines came from U.S. automakers.
AP Writer Kimberly Johnson in Detroit contributed to this report.
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