The Obama administration has turned down auto suppliers' request for up to $10 billion more federal aid to help them deal with the bankruptcies of General Motors and Chrysler.
A Treasury Department statement Tuesday said an existing $5 billion support program was stabilizing the nation's auto supply base. "No changes have been made to funding, but (we'll) continue to monitor the situation," it said.
Suppliers have lobbied for $8 billion to $10 billion in loan guarantees to help them raise money to buy raw materials and pay employees as Chrysler and GM resume production. GM has been temporarily shutting down some factories for extended periods because of growing inventories. Chrysler, which was fully shut down for more than a month, is just beginning to restart plants.
Trade groups met with the government auto task force and lawmakers last week. Ann Wilson, a senior vice president for government affairs for the Motor & Equipment Manufacturers Association, said the task force "does not see any immediate need to provide additional liquidity to suppliers."
The task force created a $5 billion support program in April to keep parts flowing for GM and Chrysler. It also provided guarantees to finance parts already shipped but not paid for.
GM and Chrysler have participated in the program, which allows the car companies to choose how the aid is distributed among the suppliers.
Suppliers have been hurt by the dramatic downturn in auto sales, and some analysts have been concerned the supply chain could collapse. Government aid and payment guarantees for GM and Chrysler have kept most suppliers afloat.
About 20 filed for bankruptcy this year, including Visteon, Ford's largest supplier, and Metaldyne.
If the plants aren't running, suppliers have no income, and when the plants restart, they must deal with a 45-day lag between when they ship parts and when they're paid again.