DETROIT (Aug. 12)—Six auto makers have agreed to guarantee some $200 million in payments to struggling interior and trim supplier Collins & Aikman Corp. The financing will carry Collins & Aikman through the end of September.
The news came less than 24 hours after U.S. Eastern District Bankruptcy Court Steven Rhodes urged lawyers representing creditors and automakers to work out an agreement. The terms of the agreement and other items that were in dispute remain under a seal issued by Rhodes.
DaimlerChrysler A.G., Ford Motor Co., General Motors Corp., Honda Motor Co., Nissan Motor Co. and Toyota Motor Corp. are parties to the agreement. All buy parts from Collins & Aikman, of Troy, Mich.
"We are pleased with the outcome," said John Boken, Collins & Aikman´s chief restructuring officer. "We now have a protocol on how payments are going to be made going forward. By and large the automakers have been very good. They pay in five days."
Rhodes agreed, and said he thought the companies were making good efforts to keep Collins & Aikman afloat. Rhodes said that while he found that the automakers were making contingency plans to keep production going should Collins & Aikman eventually close, he found no evidence they were moving work from the supplier.