- The Washington Times - Thursday, March 19, 2009

NEW YORK (AP) - Shares of several auto suppliers posted huge gains Thursday after the Obama administration said it will provide up to $5 billion in financing for the industry’s troubled companies.

Under the plan, the administration will create a financial entity to provide money for auto parts that large suppliers have shipped to the Big Three automakers but have not yet been paid for.

The funding would be made available from the government’s Troubled Assets Relief Program, or TARP.

Like the automakers, suppliers have seen their sales tumble and their share prices disintegrate over the past year as a result of the steep drop in consumer demand for new vehicles.

American Axle & Manufacturing Holdings Inc., Visteon Corp. and Lear Corp. have all warned in recent weeks that they could be forced to file for bankruptcy protection if business doesn’t pick up soon.

Meanwhile, Delphi Corp., GM’s former parts division, is still trying to restructure itself after more than three years under Chapter 11 bankruptcy protection.

In afternoon trading Thursday, American Axle shares jumped 67 cents, or 43 percent, to $2.22, while Lear shares surged 61 cents, or 84.7 percent, to $1.33.

Other major suppliers also posted gains. TRW Automotive Holdings Corp. rose 98 $1.02, or 31.5 percent, to $4.25; Tenneco rose 57 cents, or 28 percent, to $2.64; and ArvinMeritor Inc. jumped 21 cents, or 22 percent, to $1.16.

Auto suppliers have sought up to $25 billion to stabilize the beleaguered industry and have met with members of President Obama’s auto industry task force, which is reviewing $17.4 billion in loans to General Motors Corp. and Chrysler LLC and requests for billions more.

The program will be run through U.S. automakers that agree to participate. Suppliers to those companies would have to agree to terms of the government-backed protection and pay a small fee for the right to participate.

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