GM, Chrysler launch aid schemes for suppliers
- Source: Global TImes
- [11:28 April 10 2009]
- Comments
General Motors Corp and Chrysler launched government-backed assistance programs for parts suppliers on Wednesday, and the task force overseeing the carmakers' restructuring was expected to meet with GM this week to speed up the process.
The government will give $2 billion to GM to support suppliers, and Chrysler will receive $1.5 billion to maintain its supply base.
GM, Chrysler and the suppliers are required to kick in capital to participate in the program.
On March 20, the Obama administration pledged up to $5 billion to help auto suppliers, which are crucial to the survival of US automakers.
A steep drop in North American auto production has put suppliers under intense pressure and created the possibility of failures. Failure of even a small auto parts supplier could shut down production at many automakers.
GM is also trying to keep itself in business. A source familiar with the company's plans said on Tuesday that GM was in "intense" preparations for a possible bankruptcy filing that could split GM into a "new" company comprised of its most successful units and an "old" company of unprofitable units.
Susan Docherty, vice-president of Buick, Pontiac, GMC for GM, said on Wednesday the automaker needed to restructure "without a bankruptcy or with a bankruptcy".
(Agencies)