About $5 billion worth of federal loans are on their way to
auto-parts suppliers, helping to aid companies in the crippled
automotive industry beyond Chrysler and General Motors. Drawing money
from the Troubled Asset Relief Program, this new Supplier Support Program will provide auto part suppliers with the vital cash they require to stay afloat as auto sales and production sinks.
With the automakers cutting production, the effect has trickled down
to auto part suppliers, which have likewise had to curb production
themselves. With fewer orders for parts, suppliers are struggling to keep their doors open and cash has quickly dried up.
The auto industry has already received an influx of $17.4 billion to
boost the cash flow at GM and Chrysler. However, after significant
consideration, and to the delight of others in the industry such as Oklahoma City GMC dealers
the Treasury decided that other facets of the automotive industry were
also eligible for federal aid. Part of the concern was that auto
supplier bankruptcies could also jeopardize automakers that are healthy
says BMW dealer Los Angeles since many automakers share many of the same suppliers.
With the aid of both the automakers and the auto parts suppliers, the Toyota Accessories
Store believe it’s evident that the current administration would not
like to see bankruptcy as an option. In addition, the automotive supply
chain just an important to the industry overall.
Auto parts suppliers had recently asked for about $25 billion in
loans and other assistance. So far the administration is not willing to
go to those lengths. But the administration does believe that the new
funds will help sustain the most important companies within the supply
chain, which remains vital at this time says Used Cars Albuquerque.
Ultimately, the additional funds to both automakers and their suppliers
will ensure that production does not become disrupted and will be
saved. Since even the biggest suppliers are dangerously close to
insolvency, Boston Used Cars dealers agree that the funds are a vital lifeline for an industry that has rapidly destabilized.
Joe Kent is a writer for TK Carsites, an automotive website design and marketing firm in Orange, CA, that specializes in working with car dealers nationwide.
