Parts Suppliers Submit Formal Assistance Request to Treasury; Urge Immediate Action to Spur Auto Sector and Economy

WASHINGTON, Feb. 13, 2009 /PRNewswire-USNewswire/ -- On behalf of the motor vehicle parts supplier industry, the Motor & Equipment Manufacturers Association (MEMA) and its affiliate, the Original Equipment Suppliers Association (OESA), submitted a formal request to the U.S. Department of the Treasury seeking financial assistance specifically for motor vehicle parts suppliers. The document outlined three specific "bridge" suggestions for relief:

  --  Government guarantee of supplier receivables from GM, Ford, and
      Chrysler so that suppliers are able to use their receivables as loan
      collateral with traditional lenders;
  --  Institution of a "quick pay" receivables program to increase supplier
      liquidity by accelerating accounts payable payments from GM and
      Chrysler to their suppliers; and
  --  Government guarantees of commercial loans for supplier companies.

"The dramatic downward spiral that the supplier community witnessed in the last few months necessitates immediate action from the Treasury Department," said Bob McKenna, president and CEO of MEMA. "We are not seeking blanket protection from natural consolidation, but need temporary relief to sustain the very foundation of the domestic auto industry and a critical sector of the nation's economy."

The submission to Treasury states that more than 40 major suppliers filed for Chapter 11 restructuring in 2008, with industry surveys indicating approximately one-third of all suppliers are in imminent financial distress and another one-third indicating that they will be in distress during the first quarter of 2009. The submission also states that one million U.S. jobs could be at risk.

"The magnitude of the problems facing suppliers has yet to be deeply felt, and I hope we do not reach that point," McKenna stated. "Without appropriate action, automotive suppliers will be unable to return to required operations in March and April without shuttering facilities or closing entire companies. This would devastate the domestic auto industry and deepen the economic crisis."

ABOUT MEMA AND OESA

MEMA represents motor vehicle parts suppliers, the nation's largest manufacturing sector and the largest manufacturing employer in seven states. These jobs contribute to 4.5 million private sector jobs across the country. Suppliers manufacture the parts and technology used in domestic production of more than 11 million new cars and trucks produced each year, and the aftermarket products necessary to repair and maintain more than 247 million vehicles on the road today.

MEMA supports its members through its three affiliate associations, Automotive Aftermarket Suppliers Association (AASA), Heavy Duty Manufacturers Association (HDMA), and Original Equipment Suppliers Association (OESA). OESA represents more than 400 member companies having global automotive sales exceeding $300 billion and 65 percent of North American automotive supplier sales. For more information on the motor vehicle parts supplier industry, please visit www.mema.org or www.oesa.org.