Two Japanese auto parts makers have applied for the U.S. government's $5 billion financial aid package to secure their account receivables to struggling U.S. automakers, industry sources said Friday.
The two manufacturers are Tokyo-based Yazaki Corp. and Yokohama-based Yorozu Corp., the sources said, adding several other domestic auto suppliers are also considering applying for the program.
The U.S. program is aimed at shielding auto suppliers from financial damage in the event of Chapter 11 bankruptcy filings by General Motors Corp. and Chrysler LLC, by guaranteeing their account receivables to the two U.S. automakers with up to $5 billion in public funds.
To be entitled for the guarantee, auto suppliers need to pay a 2 percent portion of their total account receivables to the two carmakers.
Yazaki supplies GM and Chrysler with wire harnesses and indicators, with annual sales of around ¥100 billion in the business until recently. But sales to the two automakers have almost halved since last autumn.
Yazaki applied for the U.S. program regarding its account receivables to Chrysler and it is mulling applying for those to GM, the sources said.
Yorozu, which supplied GM with about ¥20 billion worth of suspension parts last year, applied for the U.S. program regarding its accounts receivable to GM, they added. Its sales to GM also tumbled recently.
The U.S. government launched the aid program in March and began accepting applications from auto suppliers in April.