General Motors Company said today that it has returned $140 million to the U.S. Treasury Department for a program that was created in April to help auto suppliers get paid. The program, which once had $5 billion to aid parts suppliers, has continued to shrink. GM was originally allocated $3.5 billion while Chrysler was given $1.5 billion.
The program created in April to make sure suppliers get paid during a bankruptcy process was reduced to $3.5 billion in July. There is now $2.5 billion for GM and $1 billion for Chrysler.
The 375 suppliers in the program had two options: get an immediate payment, which was twice as expensive; or they could get a guarantee of payments, which was cheaper, but payment was slower. Suppliers would than pay 1 percent if the government guaranteed payment, or 2 percent if they wanted immediate payment.
GM said half opted for each option.
– By: Stephen Calogera
Source: Detroit News