The administration will create a financial entity to provide money for auto parts that large suppliers have shipped to the Big Three automakers but have not yet been paid for. In a statement, Treasury Secretary Timothy Geithner said the "Supplier Support Program" would "help stabilize a critical component of the American auto industry during the difficult period of restructuring that lies ahead."

"They've been living on air here in the first quarter. They're not going to be able to do that much longer," he said, adding the Obama administration's move is an important one, but amounts to "a relatively small drop in the bucket" compared to what suppliers need.

"In terms of impact on the Canadian suppliers, we consider this to be a positive development, as the assistance should allow the weaker suppliers to continue operations, thereby preventing a number of bankruptcies that would have likely disrupted overall North American automotive vehicle production," [Peter Sklar] wrote in a note to clients.