Auto industry will grow

Detroit Free Press: It would make no sense to lend billions to companies that build cars and trucks while letting the companies that make the parts they put together go under.

So the $5-billion Supplier Support Program recently announced by President Barack Obama is an important safeguard for the federal investment in GM and Chrysler.

But let’s be real here. This is stopgap stuff, intended to prevent a cascade of collapsing companies in an already failing economy. It was urgently needed. It is welcome. It assures short-term stability.

But it’s not a strategy for recovery, and it’s not restructuring. With federal support, the entire industry has to keep making progress on those fronts, too. Nobody can afford to stand still atop a pile of taxpayer money.

Recovery

Whenever the national economy moves from recession to recovery and people feel confident enough to start buying vehicles again, the auto industry will be more competitive than ever. The Detroit manufacturers have to be ready with efficient production systems, top-notch models and steady supply chains.

“We will have more to say about the industry in the coming days,” an Obama administration official said Thursday. The expectation is that by the end of this month, a plan will be in place to assure that GM and Chrysler make it to the end of the year. But that cannot be the end goal. At some point, the business has to start growing again.

Auto suppliers have been hit particularly hard by the credit drought, since most of them rely on short-term loans to keep operating for the 45-60 days it takes the auto companies to pay for parts delivered. Analysts had said that as many as 500 parts-makers were on the brink of collapse.