Yesterday, automotive parts supplier Lear (NYSE: LEA) announced that it is preparing to file for Chapter 11 bankruptcy protection. The company has also lined up financing to fund operations while it is under court protection.
LEA's subsidiaries outside of the United States and Canada will not be a part of the bankruptcy filing. According to the company, its "operations outside the United States and Canada are well-capitalized, well-positioned and have a strong backlog of new business."
Perhaps it is the cynic in me, but I hope that lear can find itself some more customers in varied segments -- as the automotive sector isn't an up-and-coming one. Yes, there is a chance that the sector will come out of the current mess better than it was before, but the question is how long will it take for the segment to recover?
Yes, the current administration has developed a plan to help the automakers, but will Lear be ready and able to adapt its product offerings? Perhaps the company can use this time in bankruptcy protection to develop the new parts that will be needed to meet the current regime's fuel efficiency standards.
Bottom line: It is going to take some time for Lear to sort itself out, but the company has a chance to come back stronger than ever. This scenario will only happen as long as the company can adapt to the changing times and the changing economic climate.
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Reader Comments (Page 1 of 1)
7-02-2009 @ 2:24PM
Donovan said...
I think its about time for every American to declare bankruptcy, and just start fresh like these giant billion dollar corporations are doing. Bankruptcy just seems to be the hottest rage right now. And why should only the billion dollar corporations and business's have all the fun. starting with ZERO debt in 60 days or less.