Major trade associations representing automakers and suppliers are asking Congress for additional support as the industry confronts an economic slowdown caused by the coronavirus pandemic.
In a letter sent Friday to congressional leaders, the Alliance for Automotive Innovation and the Motor & Equipment Manufacturers Association encouraged policymakers to broaden recently enacted stimulus packages by:
- Extending tax deductions or credits to businesses with more than 500 employees that are providing paid leave due to COVID-19.
- Delay or defer quarterly federal tax payments in 2020. The administration later announced the tax deadline is moving to July 15.
- Expand or extend expensing for equipment and machinery.
- Delay the June 1 entry-into-force for the new North American trade deal.
Ford Motor Co. also supports actions laid out in the letter, a spokeswoman for the automaker told Automotive News.
“At present, we are already seeing a steep drop in retail sales over the last 10 days, as well as significant disruptions in production, including temporary closures of numerous manufacturing facilities, while dealers and service centers largely remain open,” the two trade groups said in the letter.
Supplier plea
On Thursday, MEMA asked the government for emergency grants "to keep the doors open," tariff relief and other assistance to cope with mounting pressures from the coronavirus crisis.
The supplier group asked congressional leaders to create a "Manufacturing Emergency Assistance" grant program "to keep the doors open, preserve jobs, and prevent bankruptcies in the vital manufacturing sector."
The grants could offset the costs of medical testing, the group said. The group also called for subsidies to relocate operations to the United States.
Relief from the Trump administration's tariffs on Chinese products and imported steel rank first among the list of requests MEMA made in a letter to top Democratic and Republican congressional leaders, who are considering different packages of aid that could affect a broad swath of the U.S. economy.
Auto suppliers are getting hit as automakers suspend production in North America and Europe to contain the spread of the COVID-19 virus.
Estimates for how deeply U.S. and global vehicle sales could drop vary widely. Morgan Stanley analysts said in a note Thursday they were evaluating the impact of as much as a 90 percent drop in U.S. sales over three months. Sales in China fell by more than 90 percent in February compared to a year ago as the coronavirus crisis intensified.
Audrey LaForest of Automotive News and Reuters contributed to this report.
