The slump in global auto sales has yet another victim – the Southfield, Michigan-based car parts’ maker, Lear Corp.! The company said on Wednesday that it intends filing for Chapter 11 bankruptcy for its US and Canadian units, as well as restructuring its debt under court supervision.

However, Lear clarified that its units outside the US and Canada will not be part of the bankruptcy filing; since its overseas operations are well-equipped financially; and are better-positioned, with robust accumulation of new business.

Lear would be the third parts-maker to seek bankruptcy protection over the past couple of months – following Visteon Corp. and Metaldyne Corp., who entered bankruptcy in May – and the eighth main supplier since 2005 to take the bankruptcy route. 

Lear said that it had received commitments for $500 million for a new debtor-in-possession financing, from a group of secured lenders led by J.P. Morgan Chase and Citigroup. Once Lear emerges from the aforesaid bankruptcy protection, the debtor-in-possession financing worked out with lenders would turn into exit financing with a three-year term.

Detailing about Lear’s move, Chairman and CEO, Bob Rossiter, said: “The restructuring is being undertaken to maximize the long-term value of the company. We want to assure everyone - customers, suppliers, employees, and the communities of which we are a part - that Lear is committed to positioning our business for sustainable success.”