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Thursday November 2, 2:25 AMStresses rising in U.S. auto parts sector--TRW CEOCHICAGO, Nov 1 (Reuters) - Conditions are getting worse for already stressed auto parts suppliers and more companies could file for bankruptcy in the near future, TRW Chief Executive John Plant said on Wednesday.TRW Automotive Holdings Corp. -- one of the more profitable U.S. auto parts makers -- has had to deal with problems among its own suppliers in the past two years, but production cuts the past quarter by U.S. car makers have had even more impact, Plant told analysts in a conference call. "At the moment, we are working through (difficulties) with several distressed suppliers and my expectation is that we will see further bankruptcy filings over the next few months," he said. TRW on Wednesday said its third-quarter earnings fell 50 percent and cut its full year outlook for the second time in two months due to production cuts in North America by automakers. High materials costs, price cuts to customers and stress among smaller suppliers contributed to the declines, TRW said. The number of distressed suppliers is higher than TRW has ever seen and the company has had to take exceptional action with items such as bank bills and payments to sort through the chaos, Plant said. "I don't know exactly how many and how much difficulty some of the suppliers are in to judge whether we are at a peak level now, whether it is going to peak in the next quarter, or indeed how this thing plays out," he added. Several large U.S. auto parts makers have filed for bankruptcy over the past two years as major U.S. automakers have lost market share in North America to transplant car makers, reducing demand for components. The pressure on smaller suppliers is just as intense and some lack the ability to absorb cuts by General Motors Corp. , Ford Motor Co. and DaimlerChrysler AG's Chrysler Group. Dura Automotive Systems Inc. on Monday became the latest large publicly traded U.S. auto parts maker to file for bankruptcy. Auto and truck parts maker Dana Corp. filed for bankruptcy earlier this year. Delphi Corp. filed the biggest bankruptcy in U.S. automotive history in October 2005. Collins & Aikman Corp. and Tower Automotive Inc. filed for bankruptcy earlier in 2005. |
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