GM returns $140M provided for parts suppliers

AP News
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Posted: Nov 24, 2009 7:15 PM

General Motors has returned $140 million of the $290 million it received from the government to support is parts suppliers.

The Treasury Department said Tuesday that the $140 million was part of the $2.5 billion pledged to GM to help the automaker's parts suppliers. The money came from the government's $700 billion bailout fund.

GM, however, received only $290 million from the fund for the parts suppliers. GM spokesman Alan Adler said the company now believes it will only need to use $150 million. For that reason, GM decided to return the other $140 million it got from Treasury.

Suppliers who feared that GM wouldn't pay them while the automaker was in bankruptcy protection were able to pay a fee and 2 percent interest to draw on the money, which was administered by GM, Adler said. But they drew less money as GM's cash flow improved.

GM last week announced a $1.2 billion third-quarter loss, but the company said it took in $3.3 billion more in cash than it spent in the quarter.

Chrysler received a pledge of $1 billion in support for its parts suppliers.

The Obama administration in April announced it was setting aside $5 billion from the bailout fund to help companies that supplied GM and Chrysler while the automakers went through bankruptcy filings. The total was later adjusted down to $3.5 billion.