While struggling automakers such as Chrysler and General Motors are grabbing plenty of attention for their bankruptcy restructuring, automotive suppliers are also facing their share of difficulties. With sales down, and production cut dramatically, the effects of dismal auto sales have also been difficult on auto suppliers. Lear Corp, a large seating supplier, is one such company that has struggling amid economic constraints and has filed for Chapter 11 bankruptcy protection.
Lear has already been in talks with lenders and bondholders, from which the autos parts supplier has already secured about $500 million towards bankruptcy financing. To no surprise of New York Dodge dealers, Lear has stated that the bankruptcy filing was simply the most effective method to reducing its debt amid falling demand for new cars on a global basis.
Michigan-based Lear has said that their operations outside of the U.S. will not be affected by the filing. The company earned about $13.6 billion in sales last year, with the bulk of sales attributed to GM and Ford says Newark Ford dealers. Additionally, the company has already borrowed about $1.2 billion to cover debts, but needless to say it wasn’t enough.
With billions already made available to automakers and suppliers, a Boston Nissan Murano dealer admits the investment in the industry continues to grow. However, if too little investment is made, Car Service Alexandria warns that more bankruptcies could result. This scenario is a continuing challenge in this industry that sadly won’t be dispelled until auto sales rebound. (more…)