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“The Long View” By MEMA President and CEO Bill Long

In the Midst of Uncertainty: The Need for Financial Liquidity

Date: June 12, 2020

MEMA continues to work closely with members of Congress and the Trump administration to secure critically-needed financial liquidity for vehicle suppliers. We are assisting in the development of improved, workable processes related to the current liquidity options, and we are making recommendations for a Phase-4 stimulus package that will specifically assist vehicle suppliers. This is not our wish; rather, we view it as a must-have for our members.  

In a recent letter to Treasury Secretary Steven Mnuchin, MEMA urged the administration to act. We called for the administration to bring action that is geared specifically toward vehicle suppliers. And our messaging focused on a number of key facts. First and foremost, the strength of the U.S. economy depends on the vehicle supplier industry. As vehicle manufacturing continues to ramp-up, vehicle suppliers may not have the ability to raise capital to cover wages, raw materials, or other start-up costs. Many small and mid-sized vehicle suppliers were not eligible for Paycheck Protection Program (PPP) funding and have been unable to receive financing through traditional means. Private funds will not be available to companies on the verge of insolvency, creating the need for government guarantees. If recovery is delayed or slowed, the number of vehicle suppliers facing financial insolvency could increase significantly.

We know that MEMA and its divisions are uniquely positioned to deliver this message to the administration. And we take that responsibly seriously. Over the past decade and beyond, we have worked tirelessly to ensure your voice is heard in the White House, on Capitol Hill, and in the states. We have earned our seat at the table, and now we are pulling up a chair to work on near-term solutions to financial liquidity issues. At the heart of our message: just as success breeds success, so does certainty. We are here to work together, to find solutions for the betterment of our country…and for the success of the vehicle supplier industry.

“Motor vehicle parts manufacturers are the linchpin of U.S. vehicle manufacturing,” MEMA wrote for the record of the Senate Committee on Commerce, Science, and Transportation for a hearing titled “The State of Transportation and Critical Infrastructure: Examining the Impact of the COVID-19 Pandemic.”  

“Each supplier represents jobs, financial stability, and the critical bridge for the entire industry,” MEMA stated. “The failure of a single supplier could impact vehicle production throughout the country and the continued viability of the industry, both present and future, depends on the health of the supplier industry.”

Our message is clear: Vehicle manufacturing needs a healthy and functional supply base to efficiently restart manufacturing. Although current programs under the Coronavirus Aid, Relief, and Economic Security (CARES) Act have provided critical assistance for the retention of employees, additional funds must be targeted for the purchase of raw materials and other critical costs. With this, MEMA joined with members of the Michigan delegation in urging the Trump administration to set aside necessary capital from the Main Street Lending Program to create just such a fund. Without it, the economy cannot fully recover.

We know MEMA’s efforts can help shape the future of the vehicle supplier industry. We continue to advocate and lead during these difficult and rapidly changing times. As always, please continue the dialogue. Speak up and let us know your pain points and needs. We are here to represent you and our industry in Washington, D.C.

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