The federal government announced Thursday it would provide $5 billion in assistance to auto suppliers, a potentially positive precursor for automakers that have requested billions more in assistance from the Treasury Department to stay afloat.
The Treasury Department said it would assist parts suppliers so that they could continue operations amid the economic downturn.
Chrysler and General Motors asked the federal government for billions of dollars in additional support in their viability plan filings on Feb. 17. In those filings, GM asked for as much as $30 billion in total taxpayer assistance from the government in those filings, while Chrysler said it needed as much as $5 billion to stave off bankruptcy.
The government is set to receive the final reorganization plans on March 31.
“The Supplier Support Program will help stabilize a critical component of the American auto industry d! uring the difficult period of restructuring the lies ahead,” Treasury Secretary Geithner said in a statement. “The program will provide supply companies with much needed access to liquidity to assist them in meeting payrolls and covering their expenses, while giving the domestic auto companies reliable access to the parts they need.”
In a release, the Treasury Department said it “continues to review” the restructuring plans submitted by Chrysler and GM.