The government will consider helping out parts suppliers if they are seriously hurt by General Motors Corp.’s likely bankruptcy, trade minister Toshihiro Nikai said Friday.
Nikai is closely monitoring how domestic manufacturers may be affected if GM collapses and said the government “must consider measures” if there are any signs of serious trouble, according to a Ministry of Economy, Trade and Industry official.
A person familiar with GM’s plans has said it was “probable” that the Detroit-based automaker would seek bankruptcy protection on Monday. The person didn’t want to be identified because the plans were still being discussed by the U.S. and Canadian governments.
GM’s woes have been closely scrutinized in Japan, where it has business ties with more than 100 suppliers, many of them small companies vulnerable to cash shortages.
The recent news about GM has been received with relative calm even as executives acknowledge the possibility of a ripple effect hitting the industry and U.S. consumer sentiment.
Still, worries are simmering about some of the nation’s smaller manufacturers, who may not be able to ride out the loss of GM business or handle their bad debts.
Some companies, including Aisin Seiki, have applied for a part of the U.S. Treasury Department’s $5 billion support program for suppliers, but it’s unclear whether they will receive any funds.
Nikai’s comments appear aimed at allaying such fears by assuring the government will step in and help any cash-strapped manufacturers.
In the long run, a weakened GM is expected to be a growth opportunity for the country’s automakers, which are strong at building smaller, fuel-efficient vehicles.
The Treasury has already loaned $19.4 billion to GM, which lost a whopping $6 billion in the first quarter, and will receive 72.5 percent of the new company’s stock. In bankruptcy protection, GM is expected to close factories and cut jobs.
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