The federal and Ontario governments are seriously considering assistance for auto parts companies linked to the province's battered carmakers, a spokesperson for provincial Economic Development Minister Michael Bryant said Thursday.

The comments come as the U.S. Treasury Department, in its attempt to stabilize the battered auto industry, announced Thursday it will provide up to $5 billion US in financing to troubled auto parts suppliers who are linked to Detroit's carmakers.

The funding would be made available from the U.S. government's Troubled Assets Relief Program, or TARP, said two congressional aides briefed on the plan.

Several Canadian parts suppliers have been forced to shut down operations in the last few months as the weak economy cuts into demand for new vehicles and the parts that go into them.

Most recently, 80 workers were laid off last week at the Windsor, Ont., plants of Aradco and Aramco, both owned by U.S.-based Catalina Precision Products.

The two plants are suppliers to Chrysler and members of the Canadian Auto Workers union blockaded the plants until the union reached a deal Wednesday to ensure 80 laid-off workers would get severance and back pay.

Gerry Fedchun, president of the Automobile Parts Manufacturers Association, told CBC News that parts production is down 50 per cent in the first quarter.

Fedchun said there is an urgent need for government help because many smaller companies don't have enough money to get them through the next few months.

He said the larger firms, such as Magna, Linamar and ABC, will be able to ride out the current economic troubles because they are more diversified.