Auto parts makers start receiving help

April 21, 2009

Struggling auto parts makers are already starting to apply to GM and Chrysler for their share of the $3.5 billion in aid from the U.S. Treasury Dept. that is being funneled through those two companies. GM is overseeing $2 billion and Chrysler the balance. It’s a great plan: Suppliers can opt to insure their accounts receivable or have the carmaker accelerate payments for parts in return for a 3% fee. Wow! The big guys always get their share don’t they?

Such a deal. We’ll pay you the money we owe you, but if you want it fast (after all, it’s only been 120 days since you sent us the parts), it’ll cost you. And that’s just the smokin’ deal the Tier Ones are getting. Think what the second-tier suppliers—mold manufacturers, for example—might get. You see there’s no guarantee that once the money gets into the hands of the Tier Ones, they will feel any obligation to pass through what’s owed to moldmakers for molds built a year ago. In fact, you can just about count on it.

Maybe the Tier Ones will offer the moldmakers a similar deal. If you want your money quickly, you’ll have to give a 3% discount. Mold companies are used to dealing with givebacks after years of dealing with the automakers, Tier One suppliers, and their purchasing tactics.

The American Mold Builders Assn. is working diligently with other mold, tool, and die industry trade groups to ensure that the bailout money goes to those to whom it is owed, and that the mold manufacturers get paid what they are owed.

It’s time for the OEMs and Tier One suppliers to stop the games and get serious about paying for the tooling that makes auto manufacturing possible. Money for the two players at the top means nothing if the mold manufacturing industry goes belly-up. [email protected]

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