Auto Parts Suppliers brace for March 1

March 1st is looming as the date when hundreds of U.S. auto suppliers will run out of cash as they begin to feel the effects of the Big Three production slowdowns of December and January. Payments to suppliers from Detroit’s auto makers are on track to fall 70% in March to $2.4 billion from $8.4 billion per month in the fourth quarter after the Big Three all but halted production in January amid skidding sales. Payments are due 45 to 55 days after parts are delivered, which is why the crunch will hit in March.

In 2008, 40 auto supply manufacturers filed for Chapter 11 bankruptcy, and the Motor & Equipment Manufacturers Association is now asking for a $25.5 billion bail-out for the auto-related industry. About a third of all U.S. parts manufacturers are already in financial trouble with another third set to hit the kids in March if nothing is done. Without federal help, many parts manufacturers will be unable to purchase raw materials once the March deadline passes.