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Dura CEO: Lack Of Aid Will Push More Suppliers Into Bankruptcy
June 17, 2009: 10:36 AM ET
DETROIT -(Dow Jones)- Dura Automotive Systems Inc. (DRRAQ) Chief Executive Tim Leuliette said Wednesday he expects a flurry of supplier bankruptcies over the next 60 days after the Obama Administration declined to provide the industry with more federal aid.
"There is no more money out there and that is the reality," said Leuliette who joined Dura after the company exited from its own bankruptcy in June 2008. "You will see bankruptcies but I also believe that the summer will be the bottom."
One of the biggest bankruptcy candidates is automotive seat and electronics maker Lear Corp. (LEA). The Southfield, Mich.-based company is currently trying to negotiate new terms with its lenders. The company, on June 1, elected to use a 30-day grace period to skip and interest payment of about $38 million. Lear has until June 30 to reach a new deal with its creditors.
The Obama administration on Tuesday turned down a request by auto suppliers for up to $10 billion in additional federal aid. Task force officials told industry leaders they had already provided plenty of support but didn't see the need for further action.
Leuliette said those suppliers that survive the summer will see a strengthening in the industry. There are already some small signs of recovery such as Ford Motor Co. (F) decided to boost production in the third quarter.
In the meantime, suppliers must traverse the financial squeeze from auto maker customers and its smaller supplier base.
"I have companies calling me telling me that they have parts sitting on their dock but they want me to send them a check for $1 million," Leuliette said. " There is just no cash out there and until that changes, its going to be tough."
-By Jeff Bennett, Dow Jones Newswires; 248-204-5542; jeff.bennett@ dowjones.com;
June 17, 2009: 10:36 AM ET
DETROIT -(Dow Jones)- Dura Automotive Systems Inc. (DRRAQ) Chief Executive Tim Leuliette said Wednesday he expects a flurry of supplier bankruptcies over the next 60 days after the Obama Administration declined to provide the industry with more federal aid.
"There is no more money out there and that is the reality," said Leuliette who joined Dura after the company exited from its own bankruptcy in June 2008. "You will see bankruptcies but I also believe that the summer will be the bottom."
One of the biggest bankruptcy candidates is automotive seat and electronics maker Lear Corp. (LEA). The Southfield, Mich.-based company is currently trying to negotiate new terms with its lenders. The company, on June 1, elected to use a 30-day grace period to skip and interest payment of about $38 million. Lear has until June 30 to reach a new deal with its creditors.
The Obama administration on Tuesday turned down a request by auto suppliers for up to $10 billion in additional federal aid. Task force officials told industry leaders they had already provided plenty of support but didn't see the need for further action.
Leuliette said those suppliers that survive the summer will see a strengthening in the industry. There are already some small signs of recovery such as Ford Motor Co. (F) decided to boost production in the third quarter.
In the meantime, suppliers must traverse the financial squeeze from auto maker customers and its smaller supplier base.
"I have companies calling me telling me that they have parts sitting on their dock but they want me to send them a check for $1 million," Leuliette said. " There is just no cash out there and until that changes, its going to be tough."
-By Jeff Bennett, Dow Jones Newswires; 248-204-5542; jeff.bennett@ dowjones.com;
