Treasury sets $5b to back GM, Chrysler suppliers
WASHINGTON - The Treasury Department opened a $5 billion financing support program yesterday to help auto suppliers keep parts flowing to
The program, first revealed last month, will provide government guarantees for the financing of auto parts that have been shipped to the Detroit carmakers but have not yet been paid for. The funds will be made available from the government's Troubled Assets Relief Program, or TARP, in a financial entity similar to a revolving credit.
Treasury spokeswoman Jenni Engebretsen said it "will help stabilize the auto supply base and restore credit flows in a critical sector that employs more than 500,000 American workers across the country."
GM and Chrysler, which have received $17.4 billion in federal aid and face upcoming deadlines to restructure, will designate the auto parts suppliers that need the financing, giving them a large role in determining which suppliers will survive.
The White House sent a team of 15 to Detroit yesterday to work with GM over the next two weeks to accelerate the restructuring process, an administration official said.