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Tool companies seek US bailout program - WSJ
March 19, 2010 / 11:59 PM / 8 years ago

Tool companies seek US bailout program - WSJ

* $30 billion loan guarantee sought - WSJ

* Program would be funded by TARP - WSJ

NEW YORK, March 19 (Reuters) - Cash-strapped suppliers of critical parts to industrial companies are seeking a $30 billion U.S. loan-guarantee program, The Wall Street Journal said in its online edition on Friday.

Various companies are also pressing General Motors Co [GM.UL] to speed up payments, hoping that other manufacturers will follow suit, the newspaper said.

Representatives of U.S. metal stampers and tool-and-die companies are to meet Tuesday with Commerce Department officials and Ron Bloom, the Obama administration manufacturing czar, to press for a loan guarantee program to be financed by the government’s Troubled Asset Relief Program, the newspaper said.

TARP was originally created in 2008 to support the financial services sector.

Two trade groups, the National Tooling and Machining Association and the Precision Metalforming Association, did not immediately return requests for comment. Administration officials and GM were also unavailable for immediate comment.

According to the newspaper, the companies are trying to seize on a February proposal by President Barack Obama to use TARP funds to boost small-business lending.

The newspaper said the businesses are struggling because of tight credit and because they have to pay for materials up front, only to wait months to get paid by customers. Roughly 15 percent of U.S. tooling and machining companies went out of business last year, it said.

According to the newspaper, the companies want GM to pay then one-third when they win business, one-third when work is half-complete, and the remaining one-third when work is done. (Reporting by Jonathan Stempel in New York; Additional reporting by Corbett B. Daly in Washington, D.C. and So Young Kim in Detroit)

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