Auto Parts Makers Get $5B
March 19, 2009 by Stephen Kersey
Filed under Business
The Treasury announced a program that will give U.S. auto parts makers $5 billion. The program is being put in place to guarantee that suppliers will get the money owed to them, no matter what happens to automakers.
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Speculation about whether General Motors or Chrysler end up in bankruptcy has caused concern and difficulty for parts makers to get loans they need for operations.
The $5 billion will come from the Troubled Asset Relief Program – the program set up to bailout banks and financial institutions. Only suppliers identified by the major United States automakers will be eligible for the program.
In order to get help for their suppliers, both GM and Chrysler have agreed to participate. Reportedly, GM owed its suppliers around the world $22 billion at the end of the fourth quarter.
“The Supplier Support Program will help stabilize a critical component of the American auto industry during the difficult period of restructuring that lies ahead,” Treasury Secretary Tim Geithner said in a statement.
“This decision by the U.S. Treasury is viewed as a vote of confidence for the U.S. auto industry and the future of our company,” Chrysler said in its statement.
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