Citigroup May Manage $5 Billion in U.S. Aid to Auto-Parts Manufacturers

[Purveyor]

Source: Baltimore Sun

March 26 (Bloomberg) -- Citigroup Inc., recipient of $45 billion in government rescue funds, may be the “third-party servicer” chosen by the U.S. Treasury to manage $5 billion in aid for U.S.-based auto-parts suppliers.

Citigroup will likely work with General Motors Corp. and Chrysler LLC to decide how to disperse the funds, said a document from the Original Equipment Suppliers Association, a trade group for auto-parts makers. The program may take three to four weeks from the U.S. Treasury’s March 19 announcement to “go online,” said the attachment to a letter dated March 24 and obtained by Bloomberg.

The OESA did not return calls and e-mails about the document yesterday. Citigroup spokeswoman Andrea Hurst declined to comment on the matter. The third-party role was outlined in Treasury’s initial description of the program.

Suppliers are a cash shortfall, as March payments from U.S. automakers are estimated to fall to $2.4 billion, compared with the $8.4 billion monthly average in the fourth quarter, according to the Motor & Equipment Manufacturers Association, a supplier trade group.

The OESA said last month that as many as one-third of the more than 4,000 U.S. suppliers face “imminent financial distress.” The group represents some of the industry’s biggest suppliers, including Delphi Corp., TRW Automotive Holdings Corp. and American Axle & Manufacturing Inc.

Read more: http://www.bloomberg.com/apps/news?pid=20601103&sid=aXVmWc..L8cs&refer=us

[dipsydoodle]

1. Given that

they couldn't organise a piss up in brewery I have to assume that someone is having a laugh.

[sarcasmo]

2. Am I the only one who thinks this is the wrong idea?

[acmavm]

3. No. I wonder if that idea came from Senator Citibank, aka the VP?

[Gin]

4. reminds me of when bush et al said Halliburton was the only company

with the expertise to handle the job in Iraq.

[Romulox]

5. It's another way to kick back some more $$$ to an important campaign contributor, imo. nt

[aquart]

6. Nononononononono!

[amandabeech]

7. No way!

Citibank looks like a mess.

Why ask them to do this? They've screwed up their business, now they're going to screw up GM and Chrysler even more?

The article says that the credit market seizing up is causing some of the problems with the auto suppliers. Isn't this problem with Citi?

Good grief.

[blue_onyx]

8. This has to be a joke

First Citibank gets billions thrown at them, with no strings attached. Now, they get to tell GM and Chrysler, who got raked across the coals by Congress, what they can do with the money they received. It makes no sense.