Treasury releases fund for auto suppliers

WASHINGTON, April 9 (UPI) -- The U.S. Treasury Department said it was ready to advance funds to General Motors Corp. and Chrysler LLC to keep part suppliers in operation.

GM was to receive $2 billion and Chrysler $1.5 billion that would act, essentially, as a line of credit for suppliers that need to keep finances flowing while the industry struggles through a severe downturn, The Washington Post reported Thursday.

Suppliers often wait up to 60 days for payments from automakers. In the interim, suppliers normally borrow against the bills to maintain their own inventories and payrolls. With credit hard to find, the Treasury has agreed to step in with guarantees the automakers' supply bills would be covered.

"These efforts, backed by U.S. Treasury resources, will help stabilize the auto supply base and restore credit flows in a critical sector that employs more than 500,000 American workers," Treasury spokeswoman Jenni Engebretsen said in a statement.

"This program will help suppliers access much needed liquidity during these difficult economic times," Dan Flores, a spokesman for GM said.