A $5-billion lending program by the U.S. Treasury could help struggling Chicago-area auto parts makers who have suffered steep drops in orders as car companies pull back on production.
The funds would be made available from the government's Troubled Assets Relief Program, or TARP, said members of the Obama administration's auto task force. It would create a financial entity similar to a revolving credit to provide financing for auto parts that large suppliers have shipped to the Big Three automakers but have not yet been paid for.
U.S. automakers — General Motors Corp., Chrysler LLC and Ford Motor Co. — would have the option of using the program and would be required to pay a 5 percent fee of up to $250 million to join. The car makers would designate the parts suppliers who need financing and the suppliers would have to agree to terms of the government-backed protection and pay a small fee for the right to participate.
The money would provide some relief to Illinois-based auto parts suppliers such as Tenneco Inc. of Lake Forest and Illinois Tool Works Inc. of Glenview that have been battered by the sharp downturn in the automotive industry.
Dispatches from Chicago's south side.
Thursday, March 19, 2009
Auto bailout may help Illinois-based suppliers
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