Members of the Michigan congressional delegation are asking U.S. Treasury Secretary Steven Mnuchin to provide financial assistance to auto suppliers using existing funds within the $2.2 trillion coronavirus relief package signed into law in March.
Many automakers and suppliers are gearing up for production to restart in Michigan, following Gov. Gretchen Whitmer’s announcement last week that the state’s factories could reopen Monday. Some automakers, including the Detroit 3, are aiming to reopen most plants and ramp up production in the U.S. by May 18.
“While there are many large suppliers with operations in the U.S., two-thirds of this industry’s employment is generated by small and midsized manufacturers,” the members, led by Sen. Gary Peters and Reps. Fred Upton and Haley Stevens, wrote in the letter sent Tuesday to Mnuchin.
“These entities are often U.S.-based with limited financial resources to meet the growing needs of this crisis,” they said.
Parts suppliers usually receive payment from the automakers 45 days after the delivery of goods, the lawmakers said, but vehicle production has been on pause since late March. That means suppliers have had “no access to working capital for startup costs,” the letter said.
The lawmakers are asking the administration to direct additional funds under the Coronavirus Aid, Relief and Economic Security Act toward “the purchase of raw materials and other critical costs.” The lawmakers also suggested a broader loan program with more flexible terms and a shorter loan duration to enable immediate access to liquidity.
The letter also was signed by Sen. Debbie Stabenow and Reps. Debbie Dingell, Rashida Tlaib, Andy Levin and other Michigan representatives. It was supported by the Motor & Equipment Manufacturers Association.
In addition, a bipartisan group of lawmakers sent a separate letter Tuesday to House leadership, urging them to support jobs and economic stabilization of the auto industry in future coronavirus relief packages.
The letter was signed by Upton, a Republican; Dingell, a Democrat; Ohio Democrat Marcy Kaptur; and others, and follows an effort last week by the lawmakers to gather signatures to support aid for the automotive industry in upcoming legislative proposals related to the coronavirus pandemic.
“Many businesses in the industry face a cash crunch even as they prepare to ramp back up. Liquidity is challenging, particularly for suppliers, and it will be necessary to support demand for some time to ensure a meaningful recovery,” the letter said.
