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Lear Files for Bankruptcy Protection

AP
posted: 124 DAYS 10 HOURS AGO
Text SizeAAA
NEW YORK (July 7) - Struggling automotive parts supplier Lear Corp. said it has filed for Chapter 11 bankruptcy protection after receiving the support it needed from lenders and bondholders.
The company, which makes automotive seating systems and electronics, had been negotiating with its lenders and bondholders for additional support for its restructuring plan. It previously received a commitment for $500 million in loans to finance its bankruptcy from a group of lenders led by J.P. Morgan and Citigroup.
Lear said it filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York. Subsidiaries outside the U.S. and Canada are not part of the filings, the company said.
Lear has asked the bankruptcy court to allow it to continue to provide pay and benefits for its workers without interruption and to continue to allow it to provide payments for its U.S. and Canada pensions.
It plans to present its restructuring plan to the court within 60 days.
The Southfield, Mich.-based company's filing, which had been expected since last week, makes it the first major automotive parts maker to seek court protection since Visteon Corp., the former parts arm of Ford Motor Co., filed for Chapter 11 in May. Parts suppliers have been hammered by the recession as consumers continue to shun new car purchases and automakers slash production.
Lear's troubles stem partly from its heavy dependence on the slumping North American and European auto markets, with 36 percent of its sales coming from North America and 49 percent coming from Europe.
Lear, which posted $13.6 billion in sales for 2008, is a key supplier for both General Motors Corp. and Ford Motor Co. The pair represent the company's two largest customers and account for a combined 40 percent of its sales.
Lear is also one of Ford's key component and service suppliers, part of Ford's Aligned Business Framework, which increases the automaker's collaboration with the companies.
Copyright 2009 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
2009-07-07 06:44:53
COMMENTS ( 15 )
Page 1 of 3 1 2 3 Next >>
Comp1188
11:29AM Jul 7 2009 
These failures arent Bushs fault or obamas. They have been in the making for many years and are the fault of the people who manage these companies,the unions and union workers and right up their boards of directors. Most of them should be left to fail . Our Capitalist socitey has aways been survival of the fitest. Let them fail.
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Richardkittyhawk
11:00AM Jul 7 2009 
There have been a lot of bankruptcies this year in the world of business. Yesterday, Google carried a story about a Dunkin Donuts business owner with 56 stores filing for bankruptcy. You know it is bad when the average Americans cannot afford to purchase donuts.
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PURE COUNTRY 495
10:50AM Jul 7 2009 
I've read all the previous post and they all was very good. Lobbyists are killing this country and should be totally banned. They are only good for the special interest groups that pays them. But our elected leaders, in both houses(Senate and Congress) are just as guility, for giving into these lobbyists. When our leaders are running for election, they campaign about issues that is important to this country and its citizens. Thats just to get your vote and support, after being elected the sell their vote or support to each other and the lobbyists. The 2 party system is the root cause of our dilemma. Both parties care more about making the other look bad, than whats good for this country and its citizens. Most bills or laws passed have add-ons that don't have anything to do with the original bill or its language. This is totally wrong, because things get passed that wouldn't if left to stand on their own merits. Our elected leaders must of took training or watched alot of Monty Halls Lets Make A Deal. Both parties should be abolished for the good of this country, and the elected terms of each house be cut in half. Then maybe we would see a change in this country, for the people. It's also hard to believe that with all the high education running this country, everything has so many loopholes in it. You name it from our tax structure all the way down, all by using ambigious language that can be interpreted 6 different ways. These are some of the things that this ole hillbilly with a high school education sees is wrong, and needs to be changed. Lets take care of everybody, not just the rich or the special interest groups as it is today.
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JsGodsword7
10:40AM Jul 7 2009 
if you are referring to the current President as being the reason for the Auto industry failures, you are greatly mistaken. You need only to look at the decline of ALL manufacturing during Bush's 8 years of service. He is the reason and you can also add Bill Clinton and his NAFTA in the mix also.
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JsGodsword7
10:35AM Jul 7 2009 
you are right about that!! The U.S. would be wise to also close our borders and start taxing foreign products at the same rate that they tax our goods
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