- Dec 25, 2002
- Outside smalltown, IL
Feb. 13 (Bloomberg) -- U.S. auto-parts suppliers, struggling with losses as sales dwindle, made a formal request for about $18.5 billion in aid to the U.S. Treasury Department. Parts suppliers are seeking aid after automakers cut production in the U.S. to a near-halt in the last weeks of December and into January because of plunging sales. About one- third of suppliers are in “imminent financial distress” and another third indicated they may reach that point during this quarter, MEMA said, citing industry surveys. http://www.bloomberg.com/apps/news?pid=20601087&sid=a2kCgioq69J0&refer=home $18.5 Billion. I know, it doesn't sound like much in these days of Trillion $$ legislative bills that no bothers to read. But lets see what we can buy if we want to spend that kind of cash on the auto industry. Johnson Controls - Market cap $8.1 Billion American Axle - Market cap $53 Million. Great, we have lots of money left from that $18.5 Billion. Might as well spend it on - GM - Market cap $1.5 Billion Ford - Market cap $4.2 Billion. We'd still have $4.6 Billion left from our original $18.5B Think Cerebus would let Chrysler go for that? They paid $7.4B for 80% of it 2 years ago but given their current situation, they might be smart to sell. I've no doubt that the suppliers will get their $18.5B and the others at the trough will get whatever they ask for next week. But looking at the numbers, I'm not seeing the financial sense here. Maybe I'm drinking the wrong flavor Kool-Aid?