June 9 (Bloomberg) -- U.S. car-parts suppliers plan to ask President Barack Obama’s auto task force this week for $8 billion to $10 billion in loan guarantees, after negotiating federal loans earlier this year.

Industry trade groups will request that the U.S. Treasury back at least a part of loans for auto suppliers from banks to lessen risk and increase lending, said Neil De Koker, president of the Original Equipment Suppliers Association, based in Troy, Michigan. The banks may be part of a group of lenders who could choose the suppliers to receive loans, he said yesterday.

Suppliers such as Visteon Corp., spun off from Ford Motor Co., and seatmaker Lear Corp. have lost revenue as automakers cut production amid a 37 percent drop in U.S. vehicle sales this year through May. Their cash flow was crimped further by production disruptions as General Motors Corp. and Chrysler LLC sought bankruptcy court protection, De Koker said.

“We have very good companies that can’t get financing,” he said. “It’s essential to provide support to suppliers in order to ensure that the money already spent on GM and Chrysler doesn’t go to waste.”

Suppliers will need loans to start producing parts for GM and Chrysler when the automakers resume manufacturing, De Koker said. Without funding, the partsmakers may be unable to buy raw materials and pay workers, delaying production for GM and Chrysler, both operating with government loans, as well as other automakers producing in the U.S., he said.

Meetings Planned

De Koker said his group and the Motor & Equipment Manufacturers Association, based in Research Triangle Park, North Carolina, will meet with the auto task force tomorrow, and U.S. House and Senate members later in the week. They will be joined by some supplier executives.

The Bloomberg U.S. Auto Part/Equipment Index rose 2.6 percent to its highest since Oct. 14. The 14-company gauge includes TRW Automotive Holdings Corp. of Livonia, Michigan.

Chrysler’s attempt to create a new company with Italy’s Fiat SpA was delayed yesterday when U.S. Supreme Court Justice Ruth Bader Ginsburg decided to consider a request for a longer postponement that might scuttle the deal.

The delay may exacerbate problems for suppliers, David Cole, chairman of the Center for Automotive Research, said in an interview with Bloomberg Television yesterday.

‘Messy Bankruptcy’

“The messy bankruptcy adds to the complexity of our problems at a national level very quickly,” said Cole, who is based in Ann Arbor, Michigan. “This can go out of control very, very quickly.”

Because of connections among suppliers in the U.S., failures of some providers of parts to GM or Chrysler may hurt other automakers, he said.

In a “partial collapse” of the parts industry, Ford and other automakers operating in the U.S. would “suffer a 50 percent reduction in production during the last half of 2009,” Cole’s center wrote in a May 26 report.

The OESA and MEMA trade groups helped negotiate an aid package of $5 billion this year to help ensure payments owed to suppliers by GM and Chrysler were made. Chrysler asked suppliers to avoid the program after saying it offered the manufacturers payment through the bankruptcy process, while GM has said it will use the program further as it restructures in Chapter 11.

To contact the reporter on this story: Alex Ortolani in Southfield, Michigan, at aortolani1@bloomberg.net

Last Updated: June 9, 2009 16:12 EDT