Road to Stability

Automotive Industry Financing Program

Updated: August 26, 2010

The objective of the Automotive Industry Financing Program (AIFP) is to prevent a significant disruption of the American automotive industry, which would pose a systemic risk to financial market stability and have a negative effect on the economy of the United States. The program requires participating institutions to implement plans that will achieve long-term viability.

Participating institutions must also adhere to rigorous executive compensation standards and other measures to protect the taxpayer’s interests, including limits on the institution’s expenditures and other corporate governance requirements.

DECODER: Through the Automobile Industry Financing Program, the Treasury has provided approximately $76 billion in loans or equity investments to General Motors, GMAC, Chrysler, and Chrysler Financial in order to avoid a disorderly bankruptcy of one or more auto companies; such an event would pose a systemic risk to the country’s financial system. Treasury’s loans to the automobile industry forged a path for these companies to go through orderly restructurings and achieve viability.