Auto suppliers want US government bailout

Business: Of course they do and why not since everyone else is getting one.

Auto suppliers are preparing to head to Washington to ask for government help in surviving a deep slump in car sales that has slashed the production of new cars and trucks to the lowest level in a generation. "We're formulating our position and the scope of what a potential ask might be," said David Andrea, vice president of Original Equipment Supplier Association, which is expected to handle the petition for the supplier companies. Suppliers had already asked for help in November when Congress was considering a bailout of cash-strapped General Motors and Chrysler, who were granted 13.4 billion dollars in loans. Since then, the situation has worsened as US production was slashed by 36 percent in December and is expected to be down even more in the first quarter after GM, Ford and Chrysler halted nearly all production in January. To top it all off, Chrysler said it is seeking price cuts from suppliers as part of the viability plan it has to submit to the US Treasury Department on February 17. Dozens of suppliers could be on the verge of collapse, warned Linda Hasenfratz, president of the Original Equipment Suppliers Association. "There is no production. So there is no cash coming in," said Hasenfratz, who is also the chief executive officer of Linamar Corp. of Guelph, Canada. But there are no easy fixes and the industry is headed for months of major restructuring and consolidation, warned Juergen Reers, managing partner for Roland Berger Strategy Consultants. "There are a large number of suppliers that have entered into the crisis with a relatively weak balance sheet," Reers told AFP. "They've had no revenues in recent weeks, which is putting further pressure on their liquidity. A lot of suppliers are cash constrained. Smaller and weaker suppliers are becoming insolvent."