DETROIT — The $5 billion federal bailout program for parts suppliers that was unveiled in mid-March has been a bust — flawed and bogged down in red tape. Fortunately for suppliers, the program now may be irrelevant.
"All our paperwork has been in for weeks," said the CEO of a suburban Detroit company that makes molded parts.
The cash outlays are administered by Citibank, but Generral Motors and Chrysler LLC decide which of their suppliers can participate.
After GM approved his company for the program, the CEO spent weeks trying to obtain guarantees on his receivables, including three weeks of due diligence with his lender and others.
"But Citibank does not return phone calls or e-mails," he said.
The program is designed to allow suppliers designated by GM or Chrysler to get paid early for their parts shipments or to use government guarantees of payment to borrow from their private lenders.
Another CEO, who runs a Detroit area trim supplier, faced similar problems. GM and Chrysler "say we are on the list of suppliers qualified for aid," he said. But he has yet to hear from Citibank, which he said is overwhelmed by supplier demand.
Citibank did not return calls from Automotive News.
Said GM spokesman Dan Flores: "We certainly understand there is interest in the program. We are working diligently with Treasury and Citigroup to move the program along as quickly as possible."
GM is thought to have more than 100 suppliers registered with the program as of last week.
Said Chrysler spokesman David Elshoff: "We have had more than 400 suppliers express interest in the program. We are not disclosing details about the suppliers participating in the program."