Shares of auto-parts suppliers soared Thursday on news that the Obama administration was going to help the beleaguered industry with $5 billion in loans.
"The Supplier Support Program will help stabilize a critical component of the American auto industry during the difficult period of restructuring that lies ahead," said Treasury Secretary Timothy Geithner in a prepared statement.
, the government will assure that suppliers are paid for the products they ship to automakers and will buy receivables at a modest discount, providing "suppliers with desperately needed funding to operate their businesses and help unlock credit more broadly in the supplier industry," the Treasury Department said.
More than 40 major suppliers have filed for Chapter 11 bankruptcy protection. The industtry employs about 600,000 people nationwide.
The fortunes of the suppliers have been hurt by the tremendous decline in sales by the Detroit Three automakers,
. GM and Chrysler have received billions in government loans.
have warned in recent weeks that they could be forced to file for bankruptcy protection if business didn't pick up. All were up smartly Thursday: American Axle was higher by 39% to $2.16; Visteon was up 75% to 28 cents; and Lear was up 92% to $1.38.
( ARM) was up 19% to $1.13;
rose more than 28% to $2.66;
TRW Automotive Holdings
was up 34% to $4.25, and
surged 90% to 41 cents.