Auto Parts Suppliers Demand Advance Payments From GM

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GM Suppliers Said to Seek Payments in Advance as Cash Dwindles

By Jeff Green


Dec. 11 (Bloomberg) -- General Motors Corp. has been asked for payments in advance by a small number of auto-parts suppliers after saying it would run out of money by month’s end without U.S. loans, people familiar with the matter said.

GM has rejected the requests, which so far come from a fraction of its 3,600 suppliers, said the people, who asked not to be identified because the discussions are private. GM typically pays vendors about 45 days after getting an invoice.

Demands for upfront cash add to the strain on the biggest U.S. automaker as it waits on a short-term industry rescue in Washington and the shift in power to President-elect Barack Obama and a new Congress in January. Obama favors using federal funds to remake the companies and keep them out of bankruptcy.

“Despite the current economic challenges, GM remains committed to maintaining a strong, open relationship with our suppliers,” said a spokesman, Dan Flores, who declined to give details on supplier discussions. “GM remains focused on maintaining payment terms and being a prompt payer.”

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