Quality Magazine

Automotive Suppliers Appeal to Congress

May 18, 2009

WASHINGTON, D.C.-Wes Smith, president of E&E Manufacturing, testified on May 13, 2009, before the House Small Business Committee at a hearing examining the economic impact of the domestic auto crisis on small suppliers throughout the United States, according to the Motor & Equipment Manufacturers Association (MEMA).

Smith’s testimony outlined the stresses that dramatically reduced vehicle sales volumes and a crippling inability to gain access to credit place on smaller suppliers. “For small suppliers, the drop off in industry volumes can actually be greater, the credit freeze tighter, and the customer risk more significant,” said Smith. He asked the committee to consider authorizing a parts supplier program within the Small Business Administration to address the needs of small suppliers, saying, “assistance targeted to these manufacturers is critical.”

The testimony came just days after the MEMA and the Original Equipment Suppliers Association (OESA) warned Congress that the result of the impending Chrysler bankruptcy and planned vehicle manufacturer shutdowns could be a supplier network no longer able to support to vehicle manufacturing in this country. In a letter to the full U.S. House and Senate, MEMA president and chief executive officer Bob McKenna said, “During these shutdowns, many suppliers will have no choice but to permanently close their facilities.”

The letter urged Congress and the Administration to provide direct financial assistance for suppliers beyond the Auto Supplier Assistance Program announced by the Department of Treasury in March and to immediately pass a short-term incentive program to encourage consumers to purchase new vehicles. “We need to take immediate steps to further protect the supply base,” said OESA president and CEO Neil De Koker. “This is a critical time and the stakes could not be much higher. Thousands of good manufacturing jobs and the local economies those jobs support hang in the balance.”

MEMA recently released a report titled Moving America Part by Part, which shows that parts suppliers constitute the nation’s largest manufacturing sector, directly employing more than 686,000 people and contributing to more than 3.29 million jobs. Parts suppliers also are the largest manufacturing employer in eight states: Indiana, Kentucky, Michigan, Missouri, Ohio, Oklahoma, South Carolina and Tennessee.

For more information, please visit www.mema.org.