Lear Corporation is getting ready to join a long list of major auto parts manufacturers in Chapter 11.
Mega-supplier Lear Corp., best known for its seating business, is expected to become the latest in a long and growing line-up of automotive parts manufacturers to file for bankruptcy protection.
A major supplier to General Motors Corp., itself undergoing a Chapter 11 reorganization, Lear Chairman and Chief Executive Office Bob Rossiter confirms the company has lined up funding and has negotiated an agreement in principle with its secured lenders and bondholders that would allow it to restructure its debt.
The big suppler of automotive of seating systems, electrical distribution systems and electronic products believes it has put together a plan to move through an expedited bankruptcy process that would ensure the company’s ability to survive as an ongoing enterprise.
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“We want to assure everyone – customers, suppliers, employees, and the communities of which we are a part – that Lear is committed to positioning our business for sustainable success,” Rossiter said after reaching a deal with a major block of creditors.
Rossiter said despite its financial troubles, Lear has a low-cost footprint, a diverse customer base, a solid backlog of new business and a strong cash position. It will also emerge from bankruptcy with a smaller debt load and plans to pay all trade creditors in full.