The Motor & Equipment Manufacturers Association (MEMA) outlined the response of the motor vehicle parts supplier industry and expressed concerns over the ongoing challenges it faces in the wake of the Coronavirus health crisis and subsequent manufacturing shutdowns in a detailed letter for the record to 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.” The letter, from Bill Long, MEMA President & CEO, was submitted June 3.
Long highlighted the industry’s assistance since mid-March saying, “During the COVID-19 pandemic, suppliers were able to quickly pivot normal operations to manufacturing critically needed supplies. These efforts have been focused on addressing the immediate medical and public health crisis facing the U.S. Suppliers and their employees used their skills, know-how, and compassion to assist in a time of need.
“The supplier industry is interdependent, making it impossible to separate the economic success of a supplier from its customer, whether that customer is a passenger car manufacturer, a truck manufacturer, or aftermarket distributor, or retailor,” Long says in the letter. “In addition to this economic interdependence, the industry is also made up of a complex supply chain, with each tier critically important to the industry’s ability to manufacture vehicles. Past disruptions to the supply chain, whether a result of a factory fire or natural disaster, for example, have led to temporary closures of supplier facilities and vehicle assembly plants. These closures demonstrate the integration within the industry and the potential domino effect of even a few suppliers facing insolvency.
“While there are many large suppliers with operations in the U.S., two-thirds of the industry’s employment is generated by small and mid-sized manufacturers,” the letter continues. “These small and mid-sized manufacturers are often U.S.-based, family-owned companies with limited financial resources to meet the growing needs generated by this unforeseen crisis. Without these entities, communities and states throughout the country will lose major employers and contributors to the long-term employment and economic well-being of the entire nation. Furthermore, the financial viability of the entire automotive industry is dependent on these suppliers.”
MEMA’s letter maintains that the return of a vibrant automotive industry in the United States, and the jobs and positive economic impact that it provides nationwide, will depend on programs aimed to help motor vehicle parts suppliers through this difficult time.
“Auto manufacturing needs a healthy and functioning supply base to efficiently restart manufacturing,” the letter states. “Although current programs under the 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. MEMA has 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. We are anxious to work with all parties to seek this funding. Our continued viability as an industry depends on it.”