Credit Herald

Automotive parts supplier Lear Corp. filed for bankruptcy protection on Tuesday after receiving support from lenders and bondholders to reorganize its struggling business.

The move had been expected from the maker of vehicle seats and electronics, which missed an interest payment on its bond debt last week and revealed its intention to seek Chapter 11 bankruptcy protection.

The Southfield, Mich.-based company made the filing in the U.S. Bankruptcy Court for the Southern District of New York. It listed $1.27 billion in assets and $4.54 billion in liabilities..

Lear makes seats for General Motors Corp. at a facility in Wentzville. Company spokesman Mel Stephens declined to say how many workers are employed at the local operations.
Under Chapter 11 reorganization, a company can stay in operation under court protection while it sheds debts and unprofitable assets.

Lear is the first major automotive parts maker to seek court protection since Visteon Corp instant payday loans., the former parts arm of Ford Motor Co., filed in May. Auto parts suppliers have been hammered by the economic downturn as consumers continue to avoid buying cars and trucks.

The Chapter 11 filings by GM and Chrysler Group LLC and the idling of most of their factories has dealt a particularly hard blow to the auto supply base.

Lear, which posted $13.6 billion in sales for 2008, is a key supplier for both GM and Ford, which account for a combined 40 percent of Lear’s sales.

The Associated Press and Angela Tablac of the Post-Dispatch supplied information for this report.

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