This post was originally published on this site.
Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Ford and General Motors are negotiating a potential lifeline for First Brands Group as the bankrupt car-parts supplier races to raise additional money in order to buy time to sell itself.
The two are among a group of carmakers who have been in negotiations with the Ohio-based First Brands over the past several days to work out a financing arrangement that could help keep it operating through Chapter 11 bankruptcy proceedings, according to several people familiar with the matter.
The arrangement involves the carmakers paying in advance for products they plan to receive. This would give First Brands much-needed cash to help keep its operations going, the people added.
While the deal could still fall apart, one person familiar with the matter said the talks were near the “finish line”. First Brands, Ford and General Motors declined to comment.
The intervention from two of America’s biggest carmakers underscores the importance to their supply chains of First Brands, which fell into bankruptcy in September with $12bn in debt. Since then, the company has accused its founder Patrick James and others of fraud — claims they deny.
A second person familiar with the talks with Ford and GM said that this type of agreement between carmakers and their suppliers was “quite unusual, but this is an extreme case”.
“There is a group of customers that are working to get components out as quickly as possible to avoid any disruption,” the person said.
They added that while several manufacturers were participating in the talks, “Ford is probably the most exposed and the one that’s got the most at risk here”.
First Brands makes important components for Ford and GM, including windscreen wiper parts for the F-150, Ford’s best-selling pick-up truck.
The highly profitable F-series trucks are Ford’s jewel in the crown, accounting for almost 40 per cent of its US sales in 2025.
First Brands also owns and operates 25 auto brands, many of which it acquired over the past decade, according to court papers.
It has rapidly burned through cash in bankruptcy, a court process that can notoriously cost hundreds of millions of dollars in professional fees. First Brands projected earlier this month that it would run out of money by the first week of February without additional funding, according to court papers.
First Brands is seeking to avoid running out of money to keep its facilities operating, which could lead to liquidation. Earlier on Monday it said it planned to wind down some of its operations in the US, including its Brake Parts and Autolite brands.
The company has been racing to sell assets and secure new capital from its lenders. During a bankruptcy hearing earlier this month, Sunny Singh, a lawyer for First Brands, told the court that it had been negotiating with its lenders to raise money through a new loan.
The vast supply chains for big carmakers have come under strain as a result of US tariffs, competition from China and disappointing EV sales growth.
Car suppliers in North America and Europe cut more than 60,000 jobs in 2025. More than 60 per cent indicated they were concerned about financial distress in their own supply chains, according to a survey conducted by industry publication Automotive News last month.
Additional reporting by Sujeet Indap and Eric Platt
