Suppliers seek bailout funds

WASHINGTON (AP) — Auto suppliers asked the Obama administration Friday for up to $25.5 billion in loans and government guarantees to stabilize the battered U.S. auto industry.

Two trade groups, the Original Equipment Suppliers Association and the Motor & Equipment Manufacturers Association, made the request to the Treasury Department. The aid would prevent a shortage of parts for key vehicle models and follow massive loans to U.S. automakers.

In their submission, parts suppliers asked for up to $7 billion that would go to General Motors and Chrysler so they can speed up payments to the supplier companies. They also want the government to guarantee up to $10.5 billion in longer-term payments the Detroit Three will owe suppliers and $8 billion in federal loans to parts makers.

Auto suppliers said in their 57-page submission to Treasury that more than 40 major suppliers filed for Chapter 11 bankruptcy protection and more suppliers could collapse if the government does not act. Parts makers employ about 600,000 people nationwide.

Some suppliers who make key parts for top-selling vehicle models could stop producing, forcing automakers to stop making those vehicles and undermining the ability of the carmakers to restructure.