Automotive suppliers must be wondering how they will fare under President Obama's plan for General Motors and Chrysler -- dubbed the "New Path to Viability." Yesterday we learned that this is a journey that will be taken without GM CEO Rick Wagoner. Obama's plan, released this morning, has little specific about suppliers, and nothing about plastics. Here's the relevant passage about supplier companies:
Trade creditor support will be essential to the success of the effort to restructure GM and Chrysler. The vast majority of the trade at GM and, as part of the Fiat deal, at Chrysler, will carry through the process and be fully paid. In addition, the Administration recently announced a new $5 billion Supplier Support Program. This program is already providing suppliers with the confidence they need to continue shipping their parts and the support they need to help access loans to pay their employees and continue their operations. The Administration will work closely with the car companies to implement this program in the weeks ahead and monitor closely the state of the automotive supply base.Meanwhile, our sister newspaper Automotive News has more details about that $5 million Supplier Support Program. Check out their story about how suppliers may find themselves passed over for the federal dollars if they have pressured GM or Chrysler by seeking faster payment than the standard 45 days or by arguing that the law allows them to break contracts because of doubts about an automaker's solvency. Both are strategies that suppliers have been using to protect themselves in the event of a GM or Chrysler bankruptcy.