15 April 2009 | Jake Kanter
Chrysler and General Motors (GM) were last week handed $3.5 billion (£2.3 billion) in US government loans to support their suppliers.
The US Treasury set out plans in March to make $5 billion (£3.3 billion) available to help the Detroit carmakers either guarantee payments to suppliers or speed up time taken to settle invoices.
Last week it was revealed that Chrysler received $1.5 billion (£1 billion) in funding through the scheme, while GM was allocated $2 billion (£1.3 billion). The carmakers would be able to access the remaining $1.5 billion (£1 billion) if their suppliers needed further aid.
Chrysler released some details of its supplier support programme -
being administered by Citibank - under which suppliers can either pay 2 per cent of each invoice to insure payment or pay 3 per cent to accelerate payment. Alternatively, if suppliers choose neither of these options, they do not benefit from the government-funded scheme.
Scott Garberding, senior vice-president and CPO at Chrysler, said the support would help stabilise the company's supply chain.
Treasury spokeswoman Jenni Engebretsen said in a statement: "These efforts, backed by US Treasury resources, will help stabilise the auto supply base and restore credit flows in a critical sector that employs more than 500,000 American workers."
It is part of a wider push to save the US car industry, which is struggling amid plummeting sales.
Embattled US car giants received $17.4 billion (£12 billion) in government loans in 2008 and last month had requests for a total of $21.6 billion (£15 billion) in further funding rejected by the Obama administration.