Obama’s administration today approved $5 billion in assistance to automotive parts suppliers. According to the U.S. Treasury the aid comes in the form of guarantees for receivables, or payment owed to suppliers for parts that were already delivered.
“The Supplier Support Program will help stabilize a critical component of the American auto industry during the difficult period of restructuring that lies ahead,” said Treasury Secretary Timothy Geithner.
The bailout provides a huge relief to suppliers that have been struggling due to cut in North American vehicle production cut. Suppliers originally filed for aid in December, requesting a total of $18.5 billion.
According to sources familiar with the plan, the $5 billion will cover the amount that the Detroit 3 owe their suppliers, reports Automotive News.
– By: Omar Rana