US: Suppliers take bankruptcy precautions
Ford supplier Visteon has hired legal and financial advisers to prepare for possible bankruptcy proceedings though that doesn't mean a filing is imminent, the Wall Street Journal (WSJ) reported, citing people familiar with the matter.
Meanwhile, parts makers in better financial shape, like Lear, are working with restructuring specialists and stepping up lobbying in an effort to cushion the effect of a possible industry meltdown, the paper added, according to Reuters.
The reports said uncertainty over the new US administration's willingness to increase a US$17.4bn bailout plan for the Big Three Detroit-based automakers has prompted some of the biggest US component suppliers to either plan for potential bankruptcy filings or scramble to avoid them.
Production cuts are burning into the earnings and cash balances of their suppliers and, as the consumer slump deepens, some may not survive, the WSJ said.