The Obama administration threw a lifeline to ailing auto suppliers yesterday, setting up a fund to guarantee payments from the Big Three automakers to the suppliers. Business Week reports:
 

The Obama Administration on Mar. 19 created a $5 billion fund that guarantees payments to struggling auto suppliers, especially those tied to providing parts to General Motors (GM) and Chrysler that are facing the possibility of bankruptcy.

The White House auto industry task force has been warned in recent weeks by automakers, auto industry consulting firms, and the parts suppliers themselves that a lack of credit could force as many as 500 parts suppliers into liquidation or Chapter 11 in the next 60 days.

Gov. Granholm issued a statement praising the move:

“I commend President Obama and Secretary Geithner for their efforts to provide automobile suppliers with access to the necessary credit they need to help keep this vital industry operating. Michigan suppliers and workers will benefit from the Auto Supplier Support Program, and today’s action will minimize unnecessary job losses as the administration continues to work with the entire auto industry to ensure an orderly restructuring. I am confident that the administration will soon present a comprehensive, viability plan for the entire auto industry that outlines actions that will protect jobs in Michigan and help affected workers and businesses.

“In addition to preserving thousands of jobs today, the president is committed to helping businesses create new jobs in the future. The president is in California today, highlighting the importance of a new, alternative energy industry, starting with advanced- vehicle and electric-grid development. These emerging sectors will harmonize with Michigan’s automotive expertise to create a new generation of good-paying jobs that will help the United States achieve energy independence.”