White House Helps the Under-Detroit « The Washington Independent
As Detroit waits anxiously for the Obama administration to decide whether to grant more TARP funding to the ailing automakers, the White House today announced $5 billion in federal help for a related sector: the auto-parts suppliers who are struggling right alongside the Big Three. From The New York Times:
“The program will provide supply companies with much-needed access to liquidity to assist them in meeting payrolls and covering their expenses, while giving the domestic auto companies reliable access to the parts they need,” the Treasury announcement said. [...]
Suppliers will get a government guarantee that money owed them by auto manufacturers for parts will be paid “no matter what happens to the recipient car company,” according to the Treasury statement.
As we pointed out in December, the auto-part suppliers have been too often ignored in the debate over whether to save Detroit’s automakers — not least of all because, with thousands of small companies nationwide, most suppliers aren’t too big to fail. The White House plan seems to recognize their importance to the larger economy. It doesn’t, however, answer the larger question of how to get Americans buying new cars again.