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Auto Task Force Busy Behind Scenes as Lear Corporation Teeters on the Edge of Bankruptcy

So far the Task Force is not being very successful at actually exiting the auto business as promised.

by on Jun.30, 2009

Lear Headquarters, Southfield, Michigan

In 2008, Lear Corporation ranked at number 157 among the Fortune 500.

While Lear Corporation, one of the nation’s largest automotive suppliers, is on the edge of bankruptcy, the Obama Administration’s Automotive Task Force appears to be actively lining up support from the private sector to help auto suppliers.

Following the Task Force’s rather blatant intervention over the weekend in the GM bankruptcy, the Task Force appears to be working behind the scenes to secure private money for parts suppliers after it refused further taxpayer support earlier this month, said one Detroit area consultant who asked not to be identified.

Lear, according to at least one report, is in line for $500 million worth of debtor in possession financing that was virtually unavailable at any price only 60 days ago.

Financial center blogs also speculated that the Task Force helped TRW renegotiate key covenants with key suppliers.

Meagan Hardcastle, a director and turnaround specialist for O’Keefe & Associates in Bloomfield Hills, said all kinds of suppliers are facing financial issues right now.

“We got huge liquidity problems in the supply base right now. We think several big suppliers are going to file for Chapter 11 protection,” she said.

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