USW Lauds Treasury Department’s Support of Auto Suppliers

United Steelworkers (USW) President Leo W. Gerard today applauded an effort by the Obama administration to guarantee loans for strapped auto industry suppliers through a credit insurance program. The program makes an immediate $5 billion in financing available to suppliers to major car companies to collect against receivables owed to them by auto manufacturers. The program is a government guarantee against outstanding and yet-to-be remitted invoices that will be owed to suppliers, who have tightened up credit to the Big Three automakers.

“This is the right thing to get American manufacturing back on track. It will allow auto suppliers to stay in business and protect thousands of jobs, ’’ Gerard said. “All across America, we have workers in many industries who have been affected by the collapse of the auto industry.”

Because of the credit crisis and the rapid decline in auto sales, many of the nation’s auto parts suppliers are unable to access credit and are facing growing uncertainty about the prospects for their businesses and for the auto companies that rely on the parts they ship. The credit insurance program would enable auto suppliers to borrow from banks based on what they are owed from automakers. The government would guarantee the payments if auto makers seek bankruptcy protection from creditors.

The USW represents more than 850,000 workers in North America. Some 250,000 are employed in the steel, mining, rubber, glass and engineered auto parts industries that make products used in domestic vehicles.

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