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Auto Parts Makers Get $5 Billion Lifeline
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| Contributor | particleman |
| Last Edited | particleman Mar 19, 2009 10:56pm |
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| Category | News |
| Media | Newspaper - Washington Post |
| News Date | Friday, March 20, 2009 04:00:00 AM UTC0:0 |
| Description | The Obama administration announced yesterday that it will provide $5 billion in financial aid to auto parts manufacturers, signaling the government's continued interest in propping up the domestic car industry and raising hopes that it will soon provide even more money.
As auto sales have plunged, the companies that make parts for makers have shown increasing signs of weakness. While most of the bailout attention has focused on the carmakers, most of the hundreds of thousands of jobs in the U.S. auto industry are created by suppliers.
"The failure of a few key suppliers could have brought the entire industry to its knees," said Neil De Koker, president of the Original Equipment Suppliers Association, where a third of the membership reported that it would face severe financial distress in the first quarter.
The $5 billion in federal assistance will come out of the $750 billion Troubled Asset Relief Program, the financial rescue effort passed by Congress in October. The United States has already extended $17.4 billion in loans from that program to General Motors and Chrysler, and those companies have asked for as much as $21.6 billion more.
Wall Street greeted the announcement of help for parts makers as a sign that the administration is likely to continue to aid the automakers. General Motors shares rose more than 8 percent yesterday, and Ford shares gained almost 2 percent. |
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