US auto suppliers to get $5bn aid

US consumer have cut back on buying new cars

Car parts suppliers in the United States are to receive $5bn (£3.5bn) in financing from the government.

The money will be made available from the government's bank bail-out fund.

Car companies will be able to designate the suppliers that need loans and GM and Chrysler said they would make use of the programme.

If any car parts suppliers were to collapse it could disrupt car production and inflict more damage on ailing US carmakers.

The money should help suppliers with immediate cash flow needs.

"The program will provide supply companies with much needed access to liquidity to assist them in meeting payrolls and covering their expenses, while giving the domestic auto companies reliable access to the parts they need," said Treasury Secretary Timothy Geithner.

US vehicle sales continued to fall in February, down 41% from a year ago as the recession hits demand for new cars.

GM and Chrysler already received a $17.4bn rescue package from the US government in December.

The two companies want an additional $21.6bn in aid.

Ford has not sought government support.