GM Returns $140M to Federal Government
DETROIT - General Motors Co. is returning $140 million to the federal government -- money its suppliers won't need to tap now that the automaker has emerged from bankruptcy protection, reported the Detroit Free Press.
The $140 million is part of $5 billion set aside in April for suppliers to GM and the Chrysler Group as questions arose about whether GM could pay its supply base as they drew closer to their bankruptcy filings. The total was later adjusted down to $3.5 billion.
The federal aid was meant to help suppliers avoid a cash crunch by paying suppliers more quickly than their automaker customers or to guarantee payments.
GM requested $290 million for its suppliers and of that is returning $140 million because the company expects fewer suppliers to draw on that aid, said spokesman Alan Adler.
After exiting bankruptcy, GM has been paying its suppliers more quickly and more frequently. GM started a program in which it pays most of its North American suppliers weekly instead of paying them for a month's worth of work.
The program, which GM is rolling out in Europe, also cuts the time a supplier waits to be paid to 47 days compared with as many as 60 days.
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