On March 19, 2009 the US Treasury announced the launch of the Automotive Supplier Support Program for suppliers of General Motors and Chrysler LLC. The Program establishes the parameters for participation and qualification. The term of the program is one year or less, if a bankruptcy petition is filed. Although the program has been referred to in the press as the “auto supplier bailout,” it is completely up to the US Treasury’s agent, Citibank, whether a supplier who participates will have its receivable from either General Motors or Chrysler purchased. It also appears that Citibank’s purchase of any receivables from a supplier is contingent upon receiving funding from either General Motors or Chrysler. The Program only applies to valid receivables accrued from March 19, 2009 forward.
Citibank recently made the participation contracts available. We are familiar with the documentation and are prepared to advise automotive suppliers on the pros and cons of participation. Interested suppliers should contact J.P. Murphy of our Detroit office for assistance.
