Martinrea International Inc.

Martinrea International Inc.

June 10, 2009 09:48 ET

Martinrea International Inc.: Comments on Receivables Collection in the Context of GM and Chrysler Restructurings

TORONTO, ONTARIO--(Marketwire - June 10, 2009) - Martinrea International Inc. (TSX:MRE), a leader in the production of quality metal parts, assemblies and modules and fluid management systems focused primarily on the automotive sector, today outlined its situation with respect to the payment of outstanding GM and Chrysler receivables during the GM and Chrysler restructurings.

Martinrea's Executive Chairman, Rob Wildeboer, stated: "To put it briefly, we are being paid all outstanding receivables, on time and on normal commercial terms, from all GM and Chrysler entities, in Canada, the United States, and elsewhere. It is a term of the bankruptcy filing in the United States for each of our customers that critical suppliers get paid. We have signed agreements with each of Chrysler and GM ensuring payment of amounts owed. Both customers have indicated that we are critical vendors, or critical suppliers, going forward. In Canada, neither GM Canada nor Chrysler Canada have filed for insolvency protection, and all receivables are being paid in the normal course."

In the run up to the bankruptcy filings, many automotive parts suppliers, including Martinrea, looked to secure payment of accounts receivable by various means, including the purchase of receivables insurance provided in Canada by the Export Development Corporation and securing payment through participation in the Auto Supplier Support Program in the United States.

"We believe that the bankruptcy filings of each of GM and Chrysler have been very well and carefully structured to protect the supply base, to the benefit of all of the car companies who rely on suppliers, and we commend the actions of governments in both countries," Mr. Wildeboer continued. "Our governments in Canada have done a particularly good job in ensuring a strong future for the Canadian auto sector. We also support our governments' actions in supporting the Canadian and Ontario auto industry. Without participating alongside the United States government in providing liquidity solutions to GM and Chrysler, a good part, at least, of one of our core industries would have disappeared forever, along with many direct and indirect jobs provided by the industry, and the tax revenues and all the other benefits of having a leading-edge advanced manufacturing industry. Every industrialized country in the world is striving to maintain or build an automotive industry, Canada has long punched above its weight in this regard, we have a very strong automotive cluster here, and I believe we will continue to do so in the future."

Fred Jaekel, Martinrea's CEO stated: "The first half of 2009 has seen historically low production volumes as well as unprecedented bankruptcy filings and shutdowns. At the same time, this also provides opportunities for critical suppliers to assist all of our customers. We have worked very closely with all of them. We have seen unprecedented opportunities for takeover business as the supply base continues to consolidate, and we have taken advantage of this and will continue to do so where it is prudent and profitable. Production volumes are picking up, and we see significantly more production in the third quarter than in each of the first and second quarters of this year, especially from the Detroit 3. I believe that we are moving past the bottom of this cycle, and production volumes will continue to rise. The low volumes experienced so far this year are not sustainable, as they are well below the replacement rate for North America."

The common shares of Martinrea trade on The Toronto Stock Exchange under the symbol "MRE".

This press release contains forward-looking statements within the meaning of applicable Canadian securities laws including statements relating to: the Company's role as a critical supplier; the automotive industry outlook and future vehicle production; payment of receivables by GM and Chrysler; sales, future restructuring efforts; acquisition opportunities; new business awards; automotive industry consolidation; and the Company's pursuit of its business strategies. The words "expect", "anticipate", "estimate", "may", "will", "should", "intend", "believe", "plan" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes are appropriate in the circumstances. Many factors could cause the Company's actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, those risks and uncertainties as set out under the heading "Risks and Uncertainties" in the Company's Management Discussion and Analysis dated May 7, 2009 and those risks and uncertainties as set forth in the Company's Annual Information Form and other public filings which can be found at Actual results may differ materially from those currently anticipated. Except as required by law, the Company has no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These factors should be considered carefully, and readers should not place undue reliance on the Company's forward-looking statements.

Contact Information

  • Martinrea International Inc.
    Nick Orlando
    President and Chief Financial Officer
    (416) 749-0314
    (905) 264-2937 (FAX)