Auburn Hills, Michigan – Chrysler LLC has announced the launch of its new Supplier Support Program, a result of the Obama Administration’s recent announcement of a US$5 billion program. The program provides suppliers with the confidence they need to continue shipping parts, and the support they need to help access loans to pay their employees and continue operations.
“Chrysler is extremely pleased to be able to assist in extending this support to help stabilize our supply base, preserve American jobs and ensure the continued production of quality vehicles through our Supplier Support Program,” said Scott Garberding, Chrysler chief procurement officer. “We applaud the initiative set forth by the Administration and appreciate that Chrysler and the U.S. Treasury came to complete agreement on the terms and conditions of the company’s program expeditiously. This would not have been possible without the endorsement of our first lien bank group — J.P. Morgan Chase, Citigroup, Goldman Sachs, Morgan Stanley and others — who provided the necessary authorization allowing Chrysler to make the equity contribution to implement Chrysler’ s Supplier Support Program.”
The program is available to companies incorporated in the U.S. that supply production parts and materials. Under the program guidelines, suppliers can choose insurance of Chrysler’s accounts receivable, or accelerated payment of Chrysler’s accounts receivable. The cost of the insurance option is two per cent of each invoice, while the accelerated payment option is three per cent of each invoice.
As part of the Administration’s Supplier Support Program, the U.S. Treasury agreed to contribute a $1.5 billion line of credit, with the requirement that Chrysler make a five per cent capital infusion.