The Obama administration has turned down a request by auto suppliers for up to $10 billion in additional federal aid to help the parts companies deal with the bankruptcies of General Motors and Chrysler.

The Treasury Department said in a statement that an existing $5 billion support program for auto parts suppliers was playing an important role in stabilizing the nation's auto supply base. "No changes have been made to funding, but will continue to monitor the situation," the department said.

The Original Equipment Suppliers Association (OESA) and Motor & Equipment Manufacturers Association (MEMA) were lobbying for $8 to $10 billion in loan guarantees that they said were necessary for them to get the financing they require to keep producing parts without interruption and to help them cope with the bankruptcies of General Motors and Chrysler.

The associations met with members of the Obama administration's auto task force and lawmakers last week.

They warned 49 major suppliers would close in 2009, with another 60 likely to follow in 2010. The collapse of GM and Chrysler, along with the general slump in U.S. auto sales, has left U.S. vehicle production near an annual rate of eight million vehicles, down 32.5 percent from last year.

"There are a number of parts manufacturers that are virtually on the edge of being pushed into a Chapter 11 (bankruptcy) situation," says Bob McKenna, president and CEO of MEMA. "And on the other hand, when business picks up, you've got to have money to invest in building those products to satisfy the market. But in an environment where nobody is lending money, particularly to the automotive industry, it's pretty tough."

(McKenna discusses the need for financial assistance to auto parts supplier in an interview with SearchAutoParts.com. Check out the audio on our Community Page: Part 1 / Part 2)

The supplier groups said while the $5 billion support program was helpful, they only directly benefited direct suppliers to the automakers, with many smaller firms needing additional money to survive.

Neil De Koker, president and chief executive of the OESA, said the tast force indicated that the administration didn't feel that the prospect of more supplier bankruptcies in coming months posed a systemic threat to the auto industry. He said the administration felt that only in the case of chaos or a disorderly situation resulting in assembly-line shutdown due to lack of ability to get parts, would it take a re-look at the situation, but that at moment they believe everything is working fine.

Lawmakers from auto states are seeking other ways to help supplier companies. Sen. Sherrod Brown, D-Ohio, was expected to announce a plan on Wednesday to provide a new funding source to help small and midsize auto suppliers revamp their facilities to create clean energy jobs.