The U.S. Treasury Department says it will provide up to $5 billion in financing to auto supply firms hurt by tight credit and plunging auto sales.
The department announced Thursday that the Auto Supplier Support Program will provide money for auto parts that large suppliers have shipped to major U.S. automakers but have not yet been paid for.
Participating suppliers will be able to sell their receivables (documents showing customers' promises to pay) to other companies to help the suppliers get cash without waiting for payment from the troubled auto manufacturers.
U.S. officials say they hope the new program will give suppliers the confidence they need to continue shipping parts, pay their employees and continue their operations.
A presidential task force is reviewing restructuring plans for U.S. automakers General Motors and Chrysler to determine whether it is realistic for the companies to continue operating.
GM submitted a restructuring plan asking for about $16 billion in additional loans. The government has already granted more than $13 billion in loans to GM, but the company reports it lost almost $30 billion last year.
Chrysler is asking the government for an additional $5 billion.
Some information for this report was provided by AFP and AP
