RRJ-3

Reference

Valdes-Dapena, Peter (2009, February 13). Auto parts makers ask for $25.5B in aid. CNNMoney.com Retrieved February 14, 2009, from http://money.cnn.com/2009/02/13/autos/auto_parts_support/index.htm?postversion=2009021317

Summary

According to the author, auto parts suppliers are having a financial crisis and asking for financial assistance. At first, the author states that the auto parts suppliers have submitted a request for financial assistance, and they have organized a plan to distribute their financial fund. Then, the author argues that auto parts industries have gotten a the financial crisis and that results in the fact that most employees could lose their jobs. Finally, the author claims that groups hope the credit market is not tight and they try to gain the loans by getting Treasury and government guarantees. In conclusion, the author asserts that auto parts groups are trying to solve their economic problem by finding financial assistance.

Reaction

From the article, I learned that the economic problem in the U.S. has been a big trouble in recent years. Almost all the kinds of companies faced the financial crisis, auto parts industry is just one kind of the companies. They want to get loans by using those “receivables” as guarantee. However, this method might be impossible, so the groups want to get Treasury and government guarantees to obtain loans. In my opinion, the auto parts suppliers are lucky, because they can ask for financial assistance and get loan guarantees from the Treasury and government at least. However, most companies can’t do that like them, because different companies have different abilities to solve their financial problems. Some big companies can fight against the economic crisis because of their abundant money and financial resources. Unfortunately, some small companies are unable to conduct this problem like big companies, because they usually have not enough finance to support them and they have more difficulty to get financial support from the finance institution like Treasury than the big companies. That is because it is common sense that big companies usually have better credit than small companies and it is a main resource to supply finance for government. So most small companies with weak finances are forced to go bankrupt, although a few big companies also have the same outcome. So, in this situation, small companies usually have difficulty to get through this trouble situation, many financers would like to support big companies. To sum up, I think that the small companies have a big difficulty to resolve their financial crisis.