Washington - The US Treasury Department on Wednesday launched a new programme to aid US car suppliers who have struggled to stay afloat as the wider industry stands on the brink of collapse.

The plan would focus on parts suppliers for General Motors Corp and Chrysler LLC, both of which face possible bankruptcy within the next few months. The two US carmakers are in a race against time to shed massive debt and cut operating costs or risk losing government support.

The new Treasury programme could amount to as much as 5 billion dollars, Bloomberg News reported. The money goes to GM and Chrysler, who in turn will use it to pay off debts owed to their suppliers.

The 16-month US recession has led to a more than 35-per-cent drop in domestic car sales, threatening carmakers, suppliers and dealerships alike. GM and Chrysler have already received 17.5 billion dollars in emergency government loans since December.

The Treasury said its latest support was necessary to prop up a sector of the car industry that employs about 500,000 people in the United States.

"During this difficult period of restructuring in the auto industry, the supplier support programme will provide supply companies with access to liquidity and protect good-paying American jobs while giving GM and Chrysler reliable access to the parts they need," Treasury spokeswoman Jenni Engebretsen said in a statement. (dpa)