U.S. parts suppliers to get $2.1 billion aid via GM: sources

DETROIT (Reuters) - Auto parts suppliers deemed critical to General Motors Corp's operations have been allocated $2.1 billion to be distributed through GM under the U.S. government's bailout of the U.S. auto parts industry, sources with knowledge of the situation said on Tuesday.

The government will supply $2 billion and GM will put $100 million of its own money into the bailout program, under a requirement that any participating automaker should provide 5 percent matching funds to the government money, the sources said.

On March 20, the Obama administration pledged up to $5 billion to help auto suppliers, which are crucial to the survival of U.S. automakers.

In the past week, GM briefed a few hundred suppliers that have been targeted to participate in the program. GM is working with Citigroup to determine how to distribute the $2.1 billion, one of the sources told Reuters.

The sources asked not to be named because they were not authorized to speak on the record.

GM spokesman Dan Flores said the automaker was in discussions with Treasury officials to finalize the program in the near future, but declined further comment.

The Treasury declined to comment.

GM, which is operating on $13.4 billion of government loans since the start of the year, would be the gatekeeper for the fund.

The Treasury has said that suppliers are required to pay 2 percent to secure a government guarantee of the receivables they are owed. For a higher payment of 3 percent, suppliers can opt for immediate payment from the fund.

Some of GM's suppliers, including American Axle & Manufacturing Holdings Inc and Federal-Mogul Corp, were not immediately available for comment.

Terms for the program are expected to be finalized in the next few days, and money could be made available to the suppliers about a week and a half after that, one of the sources said.

(Reporting by Soyoung Kim; Editing by Toni Reinhold, Gary Hill)