Feb. 13 (Bloomberg) -- U.S. auto-parts suppliers, struggling with losses as sales dwindle, made a formal request for about $18.5 billion in aid to the U.S. Treasury Department.

Two groups representing the companies submitted a proposal outlining three types of financial assistance, the Motor & Equipment Manufacturers Association said in a statement today. Original Equipment Supplier President Neil De Koker provided the amount in an e-mail.

Parts suppliers are seeking aid after automakers cut production in the U.S. to a near-halt in the last weeks of December and into January because of plunging sales. About one- third of suppliers are in “imminent financial distress” and another third indicated they may reach that point during this quarter, MEMA said, citing industry surveys.

“The dramatic downward spiral that the supplier community witnessed in the last few months necessitates immediate action,” Bob McKenna, chief executive officer of MEMA, said in the statement.

The proposal asks the government to back payments promised to suppliers by General Motors Corp., Ford Motor Co. and Chrysler LLC, so partsmakers can use the so-called receivables as loan collateral. The plan also seeks funding so automakers can pay suppliers faster, as well as a government guarantee of commercial loans for the parts companies.

‘Quick Pay’ Program

De Koker said $10.5 billion would be used to back receivables, with as much as $7 billion of that amount being used in a “quick pay” program to get money to suppliers faster. About $8 billion would go toward guaranteeing commercial loans, he said.

Trade publication Automotive News reported the figures, citing De Koker, earlier today.

One million jobs may be at risk if financial assistance is not provided, MEMA said in the statement. That group is based in Research Triangle Park, North Carolina.

De Koker’s Troy, Michigan-based group, an affiliate of MEMA, represents more than 400 suppliers with combined sales exceeding $300 billion.

His group includes companies such as Johnson Controls Inc., which reported its first quarterly loss since 1992 in January, and American Axle & Manufacturing Holdings Inc., which relied on GM for about 78 percent of its sales in the fourth quarter.

GM and Chrysler already have been approved for a combined $17.4 billion in U.S. emergency loans and face a Feb. 17 deadline to file progress reports on their viability plans.

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

Last Updated: February 13, 2009 17:24 EST