U.S. Treasury Department Extends $5 Billion To Parts Suppliers
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Many are viewing the Treasury Deparment's $5 billion in aid for the auto parts supplier industry a signal that more aid - and no bankruptcy filings - are sure to follow for GM and Chrysler. Yesterday's announcement of parts supplier aid comes not much before the autos task force's decision (due 3/31) as to whether GM and Chrysler are viable business concerns that deserve more taxpayer funds to weather the economic crisis.
The assistance will come in the form of $5 billion in guaranteed back payments owed to auto parts suppliers by GM and Chrysler.
For its part, the autos task force says no final decisions have been reached regarding future assistance or its conclusion regarding GM and Chrysler's long-term viability. Task force members characterized the parts supplier assistance program as "the first step of the Obama administration to help this critical industry" and claim it's aimed at staying the implosion of the U.S. auto industry.
Suppliers were pleased with the move, though it was short of the $18.5 billion they'd hoped for. Many suppliers' stock prices increased as a result of these actions.
[source: Detroit News]
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