U.S. auto suppliers seek government aid to cope with coronavirus hit

This post was originally published on this site
https://i-invdn-com.akamaized.net/news/LYNXNPEC0Q1B5_M.jpg
© Reuters. © Reuters.

By Joseph White and David Shepardson

DETROIT/WASHINGTON (Reuters) – The trade group for U.S. auto parts makers on Thursday asked the government for emergency grants “to keep the doors open,” tariff relief and other assistance to cope with mounting pressures from the coronavirus crisis.

The Motor Equipment Manufacturers Association (MEMA) asked congressional leaders to create a “Manufacturing Emergency Assistance” grant program “to keep the doors open, preserve jobs, and prevent bankruptcies in the vital manufacturing sector.”

The grants could offset the costs of medical testing, the group said. The group also called for subsidies to relocate operations to the United States.

Relief from the Trump administration’s tariffs on Chinese products and imported steel rank first among the list of requests MEMA made in a letter to top Democratic and Republican congressional leaders, who are considering different packages of aid that could affect a broad swath of the U.S. economy.

On Wednesday, President Donald Trump rejected the idea of extending tariff relief.

Auto suppliers are getting hit as automakers suspend production in North America and Europe to contain the spread of COVID-19.

Estimates for how deeply U.S. and global vehicle sales could drop vary widely. Morgan Stanley (NYSE:) analysts said in a note Thursday they were evaluating the impact of as much as a 90% drop in U.S. sales over three months. Sales in China fell by more than 90% in February compared to a year ago as the coronavirus crisis intensified.

Ford Motor Co (N:) on Thursday drew down $15.4 billion from two credit lines and said it was suspending its dividend.

On Thursday, Volkswagen AG (DE:) said it would halt production at its assembly plant in Chattanooga, Tennessee, until March 29, following similar moves by the Detroit Three automakers, Honda Motor Co (T:) and other manufacturers.

Toyota Motor Corp (T:) also announced Thursday would extend a planned two-day shutdown next week through April 3.

Automakers are not currently seeking any immediate assistance as part of a $1 trillion government stimulus and rescue package expected to soon move through Congress but instead calling for “broad economic measures to keep the economy on track.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add Comment