Michelin, the global tire giant, had been operating here since 1975 when BMW brought dozens of parts suppliers to the Upstate in 1994 as it began assembling cars at its Greer, S.C., plant. Some were already doing work for General Motors, Ford and Chrysler, and some added the Big Three as customers after they arrived.
The BMW supply network is an important component in the state’s economy, with 49 such companies employing more than 10,000 workers.
With the program announced Thursday, companies that supply the auto manufacturers said they are studying the details to see if it fits their needs.
"At first glance, the program has some interesting elements," said Lynn Mann, spokeswoman for Greenville-based Michelin North America. "Michelin will analyze the specifics of the Auto Supplier Program, in line with our business situation, and then decide whether or not to participate."
Mann added that, "less than 5% of Michelin North America’s sales are to the Detroit 3."
Some companies don’t expect to immediately participate in the program.
Bosch Corp., which has had layoffs at both its Anderson and Charleston plants and is planning to halt production on some days the next few months, "is not applying for any federal aid at this time," said Becky MacDonald, company spokeswoman.
But a trade group that represents parts suppliers saw Thursday’s announcement as a big win for the industry.
"This is a tremendous step toward stabilizing the supply base, which will benefit the domestic automotive manufacturing industry," said Bob McKenna, president of the Motor & Equipment Manufacturers Association. Last year, 40 auto supply companies filed for Chapter 11 restructuring, according to the association.
Ann McCulloch, spokeswoman for the group, said the program also is likely to help the suppliers of international car manufacturers with U.S. plants.
"Most of the supply base provides multiple automakers," she said. "If they supply GM, they probably also supply the European automakers, like BMW."
Because of the difficulties facing auto suppliers, MEMA formally requested up to $25 billion in aid for its members in mid-February and has met with the Obama administration’s auto industry task force.
"We are not seeking blanket protection from natural consolidation," McKenna said, "but need temporary relief to sustain the very foundation of the domestic auto industry and a critical sector of the nation’s economy."
Under the government plan, funding for parts suppliers would come through the Troubled Assets Relief Program. The government would create a financial entity to provide payment for parts that large suppliers have shipped to the Big Three automakers but have not yet been paid for, Treasury Secretary Timothy Geithner said in a statement.
The Supplier Support Program would "help stabilize a critical component of the American auto industry during the difficult period of restructuring that lies ahead," he said. "The program will provide supply companies with much needed access to liquidity to assist them in meeting payrolls and covering their expenses."
The program is to be run through U.S. automakers – GM, Chrysler and Ford. GM and Chrysler have agreed to participate. Ford said it doesn’t expect to need to participate in the program.
McCulloch said that stabilizing the industry would help all suppliers.
"As the larger suppliers become stable, it will continue down the chain," she said.
But the program doesn’t guarantee the survival of all companies.
The Treasury Department said suppliers supporting the Big Three "will need to engage in a substantial restructuring to achieve long-long viability." But the government "is committed to helping stabilize the industry, protect American jobs and give consumers the confidence and the means to purchase cars." (Tire Review/Akron)
