The bailout program would provide new capital into the industry and allow the automakers to pay their parts suppliers. Something that these companies have found to be difficult to do right now. And that would free up credit from suppliers to automakers and would open things up throughout the chain of distribution.
Those in Congress need to be aware that if they don’t act to help the automakers then the adverse affect would work right down the pipeline of distribution back to the suppliers. A bailout would, in effect, save the auto industry and rejuvenate the parts industry.
It is said that if the domestic auto industry does not receive assistance from the government, then the parts suppliers would have to lay off as many as 275,000 workers immediately. Moreover, about one-third of all parts suppliers are at risk of having to file bankruptcy themselves.