Local Auto Suppliers, Vendors Fear GM Collapse

Nearly 2,000 people work for suppliers, vendors in North Texas

By LINDSAY WILCOX

Updated 11:05 PM CST, Wed, Nov 19, 2008

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General Motors employees are not the only ones watching Washington, where a vote on a $25 billion bailout for Detroit's Big Three was canceled Wednesday.

Senate Majority Leader Harry Reid scrapped a planned vote for the package, saying talks on the bailout were going nowhere.

When sport utility vehicles roll off the line at the GM assembly plant in Arlington, many make their way to Kerr Industries in Grand Prairie.

The small, second-stage manufacturing plant installs add-ons to police pursuit vehicles. The operation has tripled in size since it opened five years ago and now employs 25 people.

"Every product that we have at this point is a General Motors product," plant manager John Moersch said.

Like many who rely on GM for their livelihood, workers at Kerr Industries are concerned about the company and the auto industry as a whole.

"It not only impacts the 25 people we have, it also impacts all of our vendors right on down the line," Moersch said.

Kerr employees were monitoring the news out of Washington about the doomed $25 billion bailout for Detroit's Big Three.

"Without that loan package, if General Motors shuts their doors, so do we," Moersch said.

General Motors says its economic impact on suppliers and vendors in North Texas adds up to 1,800 jobs and more than $82 million a year in salaries, most at Android Industries and Lear Corp. in Arlington.

"The impact in Arlington would be catastrophic not only to the local automotive suppliers, but also to the local industries that are in the community," Lear plant manager Leonard Fox said at a rally for GM on Tuesday.

The Big Three -- hobbled by lackluster sales and choked credit -- are burning through money at an alarming and accelerating rate. General Motors has said it could collapse within weeks.

The White House and congressional Republicans rejected Democrats' plan to dip into the $700-billion Wall Street rescue fund to finance loans to U.S. automakers.

On Wednesday, Reid called off a vote on the bill. He said it was up to Bush's team to act, saying Treasury Secretary Henry Paulson can tap the financial industry bailout money to help auto companies.

But White House spokeswoman Dana Perino said there was "no appetite" in the administration for using the financial industry bailout money to help auto companies.

The White House and congressional Republicans instead called on Democrats to sign on to a GOP plan to divert a $25 billion loan program created by Congress in September that was designed to help the companies develop more fuel-efficient vehicles.

A bipartisan group from auto industry states is working to cut a deal on a scaled-down aid package. Negotiators were discussing an aid package of $5 billion to $8 billion to help the automakers survive through year's end.

If an acceptable deal emerges, Reid said it could be passed as part of a measure to extend jobless aid to unemployed workers whose benefits have run out. A vote on that bill is likely on Thursday.

But there was little sign that Democratic leaders would go along.

They are vehemently opposed to letting the car companies tap the fuel-efficiency money -- set aside to help switch to vehicles that burn less gasoline -- for short-term cash-flow needs.