A group of 35 major auto suppliers is asking for $10 billion in federal loans in order to stave off bankruptcy. AutoBlog explains why this help is necessary:
Nowadays, assembling an automobile is like a giant jigsaw puzzle, and bits come from all around the globe from thousands of possible suppliers. As it currently stands, these parts suppliers are paid on a 45-day cycle, but that’s not going to be good enough to keep many of them from bankruptcy as auto sales in December were horrid nearly across the board, and January sales aren’t going to be any better.
The suppliers are asking that the loans be distributed through the automakers themselves, with federal loans given to the Big Three, who would then pay their parts supplies on a 10-day cycle. But with two of the Big Three automakers due to submit restructuring plans to Congress in three weeks, it is unlikely that any new spending will be done in this regard until those plans are made public.