Lear Says GM, Chrysler Exposure 'Manageable' Despite Shutdowns
15 May 2009 - 12:34AM
Dow Jones News
A top executive at Lear Corp. (LEA) said Thursday that the auto
parts supplier didn't expect a working capital crunch in the fall
despite further production cuts by U.S. manufacturers.
Matthew Simoncini, chief financial officer, also said the U.S.
company had been approached by a potential lender as it seeks to
restructure its balance sheet.
The auto interiors specialist is battling a 36% fall in global
vehicle sales during the first quarter, and counts on General
Motors Corp. (GM) for 20% of sales.
GM and Chrysler, both surviving on U.S. government loans, are
trimming production further over the summer.
"Our exposure with Chrysler and GM is very manageable," said
Simoncini on a conference call after Lear reported a first-quarter
net loss of $264.8 million following a 44% slide in revenue to
$2.17 billion.
"We have anticipated it [and] we've run the models," he added,
noting that while it may burn some working capital in the third
quarter, cash burn is expected to improve sequentially through the
year.
Lear is owed $75 million to $100 million in receivables at any
given time, noted the executive. It is participating in the U.S.
government guarantee programs for auto suppliers being managed by
GM and Chrysler.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135;
doug.cameron@dowjones.com