Procurement officials from
discussed growing concerns about U.S. car-parts makers and a range of options with members of President Barack Obama's auto task force in meetings this week, the
Wall Street Journal
Auto suppliers have been raising the alarm over their finances, and the industry's trade group, the Motor & Equipment Manufacturers Association, submitted its own proposed rescue plan to the Treasury Department on Feb. 13. A week later, the group sent a letter to President Obama asking that "immediate attention" be paid to their plight, arguing that at least a million jobs were at jeopardy, the
Concern over the shakiness of the auto-parts base is consuming enough of the administration's attention it could delay resolution of GM's and Chrysler's bailout requests, the
reports, citing a person close to the talks. That could push the bailout talks past the March 31 deadline outlined in the terms of the $17.4 billion in loans the two companies were granted in December, this person said. Both GM and Chrysler seek additional U.S. aid.
The number of U.S. auto-parts makers has dwindled for years, and some industry executives now fear the industry may be headed for mass liquidations as auto production shrinks, the newspaper reports. Lenders increasingly have been refusing to extend credit to parts makers that do major business with the three U.S. car makers, which in turn can't afford to rescue even their most vital suppliers.
, the largest parts supplier to GM, won court approval Tuesday to terminate health benefits for about 15,000 retired salaried employees, arguing the move is critical to keeping its slow-going bankruptcy reorganization afloat, according to the
Also Tuesday, the leadership of the United Auto Workers union at Ford recommended its members ratify contract concessions reached in the past two weeks with the company, including easing work rules, capping supplemental pay for idled and unemployed workers, ending cost-of-living increases and adding flexibility to how Ford funds health care for retirees, the
reports hourly workers at Ford will get yet another round of buyout and early retirement offers, and the company's top two executives will take 30% pay cuts as Ford tries to find a way out of the worst auto sales slump in 26 years.
CEO Alan Mulally and Executive Chairman Bill Ford Jr. will see the salary reductions this year and next, according to a memo obtained by the
In addition, local union leaders were told Tuesday that the company will make buyout or early retirement offers to all 42,000 U.S. hourly workers. The offers are part of a series of contract concessions in a tentative agreement reached between the UAW and the company, according to two union officials briefed on the deal.
The union also agreed to take as equity 50% of the payments that Ford is required to make into a union-run trust fund that will take over retiree health care expenses starting next year. The company owes the fund roughly $13.2 billion on a $23.7 billion liability.
One of the union officials said Ford will guarantee a certain level of payments during the first three years of the trust even if the stock value drops. He said the union was able to preserve the workers' base pay.
The Ford deal likely will be the template for similar concessions at Chrysler and GM, although the union reached a deal with Ford first. Chrysler and GM must meet concession targets as part of the federal loans that are keeping them afloat.
This article was written by a staff member of TheStreet.com. AP contributed to this report.