Updated from 12:06 p.m. EDT

Help is on the way for auto suppliers.

The Obama administration says it will provide up to $5 billion in a program to help stabilize the automotive supply base and restore credit flows.

"This announcement represents the first step of the Obama administration's effort to help this critical industry," Steven Rattner, the adviser to the president's auto task force, told reporters on a conference call Thursday.

"Unlike General Motors ( GM) and Chrysler, (suppliers) have yet to receive any help at all from the government, even though they are suffering from the same problems," he said. "Without a supplier base, the OEMS (original equipment manufacturers) obviously cannot function, cannot make cars."

The program, which takes its funding from the Troubled Asset Relief Program, will be run through U.S. automakers who seek to participate. So far, Ford ( F) has not done so.

Essentially, the government is establishing a revolving credit facility, facilitating the credit needs of suppliers who pay fees of 1% to 2% for participation. Besides the $5 billion, GM and Chrysler will each provide an amount equal to 5% of the facility they have available, or $250 million each.

Receivables referring to goods shipped after Thursday will be eligible for the program. The automakers will select the participants. "They know far better than we do who needs help," Rattner said.

The program is not available to foreign automakers with U.S. plants, or to foreign suppliers. "The suppliers in stronger part of auto industry don't have same problem, Rattner said. "They don't have same degree of uncertainty about receivables."

GM applauded the program, saying it "can help reduce the risk of vehicle production disruptions that would occur if auto suppliers were unable to produce due to lack of access to working capital liquidity," according to a prepared statement.

Auto suppliers have been hard hit by Detroit's woes.

Last week, American Axle ( AXL) said its auditors raised "substantial doubt about the company's ability to continue as a going concern."

In its annual report, the Detroit-based supplier said it is a victim of "the current automotive industry environment and the uncertainty relating to the ability of General Motors and Chrysler to continue operating as going concerns," and that it may be unable to comply with financial covenants. GM and Chrysler account for 84% of sales, the company said.

Thursday afternoon, shares of GM were trading up 34 cents to $2.17. Shares in Ford were down 2 cents at $2.45. Shares in American Axle were up 62 cents to $2.17. Other auto parts suppliers also rallied.

Auto suppliers have been hard hit by Detroit's woes.

Last week, American Axle ( ALX) said auditors raised "substantial doubt about the company's ability to continue as a going concern."

In its annual report, the Detroit-based supplier said it is a victim of "the current automotive industry environment and the uncertainty relating to the ability of General Motors and Chrysler to continue operating as going concerns," and that it may be unable to comply with financial covenants. GM and Chrysler account for 84% of sales, the company said.

GM CEO Rick Wagoner told reporters last week that the suppliers need help.

"The longer the industry runs at lower production levels, the greater the concern grows," he said, at a breakfast sponsored by The Christian Science Monitor. "Hopefully, some help is on the way soon, because it's getting pretty drastic for suppliers."