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Auto Suppliers Seek $25.5 Billion Government Bailout

02/17/2009
The Original Equipment Suppliers Association and the Motor & Equipment Manufacturers Association, two trade groups representing U.S. automotive suppliers, have made a formal request to the Treasury Department for up to $25.5 billion in loans and government guarantees to stabilize their industry. The Associated Press reports that the groups want Treasury to provide General Motors (GM) and Chrysler with $7 billion to speed up their payments to supplier companies, along with guarantees of $10.5 billion in long-term payments that GM, Chrysler, and Ford owe to their suppliers, and $8 billion in loans directly to parts manufacturers. The trade groups' submission to Treasury says that more than 40 major suppliers have filed for Chapter 11 bankruptcy protection during the recession. "The dramatic downward spiral that the supplier community witnessed in the last few months necessitates immediate action from the Treasury Department," says Bob McKenna, president and CEO of the Motor & Equipment Manufacturers Association. "We are not seeking blanket protection from natural consolidation, but need temporary relief to sustain the very foundation of the the domestic auto industry and a critical sector of the nation's economy." AP reports that the Treasury Department had no public comment on the request.

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