GM & Chrysler Can't Cover Invoices

More money to GM, Chrysler
Today the shares of the auto parts suppliers rose dramatically. I thought that was weird because of the state of the industry, so I started to dig through headlines to see why. What I found was that the government has ‘pledged’ $5 billion in guarantees to the auto parts manufacturers for any parts shipped to GM or Chrysler after March 19, 2009. Where does the $5 billion come from you ask? Well, GM & Chrysler borrowed it from the government in the form of a line of credit.

It’s funny the way the news and the Treasury are reporting this. They call it a “supplier support program”. In actuality, GM & Chrysler couldn’t afford to pay their AR, so they borrowed from the government credit line to cover their outstanding invoices.

The total amount of loans for GM & Chrysler YTD =$17.4 Billion!