U.S. Treasury Announces Auto Supplier Support Program

19 March 2009 Publication
Authors: Mark A. Aiello Thomas B. Spillane Ann Marie Uetz

Legal News Alert: Automotive Industry

On March 19, 2009, the U.S. Department of the Treasury announced the creation of the Auto Supplier Support Program (Program), which is intended to help stabilize the automotive supply base. The announcement provides some important information on the details of the Program, but leaves many questions unanswered. Below are highlights of the Program:

  • Total size of the Program is $5 billion.
  • Any “domestic auto company” (Participating OEM) is eligible to participate. Currently, General Motors Corporation and Chrysler LLC have agreed to participate and will be releasing additional details about suppliers' participation in the Program.
  • “U.S.-based suppliers” that are selected by the Participating OEM and that are on “qualifying commercial terms” with the Participating OEM may participate in the Program.
  • Participating suppliers, working with their lenders, will be able to apply for government backing of eligible accounts receivable from a participating OEM or will be able to sell (factor) eligible accounts receivable to “third-party servicers,” for a “modest” fee or discount.
  • The Program applies to accounts receivable generated from goods shipped AFTER March 19, 2009.

Further clarification will be required regarding the Program. In particular:

  • What are the requirements to qualify as a “U.S.-based supplier”?
  • What constitutes “qualifying commercial terms” with the Participating OEM?
  • What fees or discounts will apply?

Foley’s Automotive Crisis Response Team will continue to review the requirements of this Program and will share additional details as they become available.

 


Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our automotive clients and colleagues. If you have any questions about this alert or would like to discuss this topic further, please contact your Foley attorney or any of the following individuals:

 

Mark A. Aiello
Detroit, Michigan
313.234.7126
maiello@foley.com

Steven H. Hilfinger
Detroit, Michigan
313.234.7123
shilfinger@foley.com

Judy A. O’Neill
Detroit, Michigan
313.234.7113
joneill@foley.com

Thomas B. Spillane
Detroit, Michigan
313.234.7135
tspillane@foley.com

Ann Marie Uetz
Detroit, Michigan
313.234.7114
auetz@foley.com

Related Services

Insights

A Review of Recent Whistleblower Developments
19 July 2019
Legal News: Whistleblower Developments
Cloud security inadequate for Cyber threats, are you surprised?
19 July 2019
Internet, IT & e-Discovery Blog
Blockchain: A Tool With a Future in Healthcare
18 July 2019
Health Care Law Today
Do You Know What IMMEX Stands For?
16 July 2019
Dashboard Insights
Review of 2020 Medicare Changes for Telehealth
11 December 2019
Member Call
2019 NDI Executive Exchange
14-15 November 2019
Chicago, IL
MAGI’s Clinical Research Conference
29 October 2019
Las Vegas, NV
Association for Corporate Counsel Annual Meeting 2019
27-30 October 2019
Phoenix, AZ