DETROIT, Jan. 4 (UPI) -- Slower production and tighter financing are lined up to create a tough year for the U.S. automobile supply industry, a trade group official said.
Neil De Koker, president of the Original Equipment Suppliers Association, said that after shutdowns of many factories in 2009, "suppliers are right on the edge financially. We will see more bankruptcies this year," The Detroit News reported Monday.
About 60 automobile supply companies filed for bankruptcy protection in 2009, while about 200 more simply shuttered their shops and went out of business, the newspaper said.
De Koker said the White House expects the automobile supply sector is due for a sizable correction. "They think capacity needs to be reduced by 30 percent," he said, referring to discussions with Ron Bloom, a key adviser to the Obama administration on the automobile industry.
As the industry struggles, OESA's request for $8.5 billion in federal aid was turned down.
This year, with credit still tight, ""I don't think we're out of the woods. We'll continue to see failures. There's still too much capacity. I am still concerned," said Ford Motor Co.'s head of purchasing Tony Brown.