Government to end supplier support in April

According to the Detroit News, Neil Barofsky, the special inspector general overseeing the $700 billion bailout fund, has told Congress that the Treasury’s automotive supplier support program will be shut down in April.

The Obama Administration created the program to address the serious cash flow problems faced by suppliers due to declining orders, concerns about General Motors and Chrysler being unable to pay their bills and tight credit markets that prevented suppliers from financing their receivables. So far, the program has earmarked out about $2.5 billion in guarantees to GM vendors and about $1 billion to Chrysler Group suppliers.

In the same report, Barofsky confirmed that $3.7 billion remaining unpaid from loans to Chrysler LLC is unlikely to be repaid by Chrysler Group LLC. The report said, “As of December 31, 2009, no repayment of TARP funds had been received from old Chrysler, and none is anticipated.”