Visteon, Metaldyne File for Bankruptcy as Automakers Cut Orders for Parts

[Purveyor]

By Alex Ortolani and Jeff St.Onge

May 28 (Bloomberg) -- Visteon Corp., the former parts- making unit of Ford Motor Co., and chassis manufacturer Metaldyne Corp. filed for bankruptcy protection after a global slump in vehicle sales reduced orders from U.S. automakers.

Ford will provide financing to help Van Buren, Michigan- based Visteon operate while in bankruptcy, Visteon said in today’s Chapter 11 filing in U.S. Bankruptcy Court in Wilmington, Delaware. Metaldyne, a Plymouth, Michigan-based unit of Japan’s Asahi Tec Corp., plans to sell its businesses, according to yesterday’s filing in New York.

Automakers’ U.S. sales plunged 37 percent this year through April, with sales at Dearborn, Michigan-based Ford, Visteon’s largest customer, dropping 40 percent. Chrysler LLC, Metaldyne’s biggest unsecured creditor with a $27.5 million claim, filed for bankruptcy last month and General Motors Corp., the largest U.S. automaker, may seek court protection as soon as this weekend.

“The decline in revenue for suppliers due to the fall off in new car sales is having a profound impact on all suppliers,” said Scott Eisenberg, a managing partner at Amherst Partners LLC, a Birmingham, Michigan-based restructuring firm. “Those with high leverage are going to have to downsize and restructure.”

Ford said it anticipates other lenders will be involved with Visteon’s so-called debtor-in-possession financing. Ford has no plans to change its relationship with the supplier, “including not buying back businesses or manufacturing operations,” the automaker said in a statement.

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BLOOMBERG: http://www.bloomberg.com/apps/news?pid=20601087&refer=top_news&sid=aRt3WB6i_uQM

[sarcasmo]

1. Let the free fall begin. Kick and Nom.

[jdlh8894]

2. What?

Kick and Nom another 200,000 people out of work? AH !!!

[sarcasmo]

3. I kicked and Nominated the article not the situation.