gm_logo_2.jpgGeneral Motors has returned $140 million to the US Treasury Department due to internal cost cutting and reduced supplier costs. The program was created in April and gave GM access to $2.5 billion to allow GM to offer financing options to its suppliers.

The aid program was created to help assure suppliers that they would continue to receive payment during both GM’s and Chrysler’s bankruptcies and originally had allotted GM $3.5 billion, and Chrysler $1.5 billion.

In July, the amounts were reduced to $2.5 billion for GM, and $1 billion for Chrysler due to decreased demand.

Suppliers taking advantage of the program were given two options: receive an immediate payment, or receive a guarantee of payments. The immediate payment option had a fee of 2 percent, and the guaranteed plan required only a 1 percent fee.

Due to the added fees involved with immediate payment, only half of the suppliers using the program chose the immediate payment option. GM reports that approximately 375 of its suppliers chose to participate in this program with one of the two options.

“The biggest reason is suppliers are feeling better about getting paid through normal channels,” said GM spokesman David Adler in an interview with the Detroit News.

In total, GM currently has access to $2.5 billion, but is using far less to pay its suppliers. Up to $150 million in potential funding for GM is set to expire next year.