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Bankruptcy fears grip U.S. auto-parts firms: report

(Reuters) - Visteon Corp <VC.N>, one of Ford Motor Co's <F.N> biggest parts suppliers, has hired legal and financial advisers to prepare for possible bankruptcy proceedings, the Wall Street Journal reported, quoting people familiar with the matter.
/ Source: Reuters

(Reuters) - Visteon Corp , one of Ford Motor Co's biggest parts suppliers, has hired legal and financial advisers to prepare for possible bankruptcy proceedings, the Wall Street Journal reported, quoting people familiar with the matter.

The hirings don't mean a bankruptcy filing is imminent, the paper said, quoting the people.

Meanwhile, parts makers with stronger finances, like Lear Corp , are working with restructuring specialists and stepping up lobbying in an effort to cushion the blow of a possible industry meltdown, the paper added.

Visteon and Lear Corp were not immediately available to comment.

Some of the biggest U.S. auto-parts makers are planning for potential bankruptcy filings, or are scrambling to avoid them, amid uncertainty about Washington's willingness to increase a $17.4 billion bailout plan for Detroit's Big Three automakers, the paper said.

Production cuts at U.S. automakers are burning into the earnings and cash balances of their suppliers and, as the consumer slump deepens, some may not survive.

General Motors Corp , Ford and Chrysler have slashed production as they strive to turn around their businesses, though government aid has removed some of their default risk, at least temporarily.

(Reporting by Bijoy Koyitty in Bangalore; Editing by Ian Geoghegan)