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Original equipment manufacturers (OEMs) have emerged as a decisive force in automotive restructurings, playing a critical role in shaping both the trajectory and ultimate success of the processes.

Their influence has become increasingly significant amid an unprecedented industry crisis, which has left a growing number of auto companies in financial distress and engaged in lengthy and highly complex restructuring negotiations.

For many struggling suppliers — particularly tier one and tier two manufacturers — OEMs represent the sole or the ultimate end-customer.

This dependency gives OEMs a unique and powerful position in any restructuring scenario, allowing them to shape outcomes in ways that can determine whether a supplier survives, or fails.

In the restructuring of German automotive sealing systems maker Standard Profil, currently proceeding under an English scheme of arrangement, OEMs have played an influential role.

The company has indicated that OEMs are even prepared to provide between $53-76m in funding from September to March to keep operations running during a potential sale process. Should the scheme fail to gain approval and the matter move into insolvency proceedings in Germany, an accelerated sale of the business would take place.

OEMs may also facilitate tooling transfers or reallocate key programs to alternative suppliers if the distressed party cannot meet requirements, ensuring continuity of vehicle production. In some circumstances, they can also acquire distressed assets outright, either in the course of debt restructuring or via bankruptcy proceedings, to preserve critical supply capabilities.

A similar situation may be unfolding with Italian car parts manufacturer CLN Coils, which is reportedly in talks with its main customer, Stellantis, regarding the potential acquisition of some of its assets. The company’s supply contracts with Stellantis are also under discussion as part of the negotiation, while CLN tries to ease its liquidity pressure and address its heavy debt load.

The rationale for these OEM interventions is usually straightforward: the sudden collapse of a key supplier can bring production lines across multiple vehicle programmes to a standstill, an outcome far costlier than offering temporary support. To mitigate the risk involved in such measures, OEMs typically secure protective terms such as priority supply rights, repayment agreements, or partial ownership of critical assets.

In essence, a managed restructuring is vastly preferable to a disorderly bankruptcy that halts assembly plants and disrupts the entire supply chain. Furthermore, this way they can use their leverage to shape the supply base in a manner that strengthens their own competitive position.

Given their high level of influence, OEMs are often on a collision course with banks and other creditors during restructuring negotiations, as their strategic priorities can diverge sharply from lenders’ focus on maximising repayment and protecting financial returns.

Even when OEMs are part of the creditor group, their objectives extend beyond debt recovery, to include maintaining convenient prices, safeguarding production continuity, securing order fulfilment, and ensuring uninterrupted supply for their vehicle lines.

Negotiations for German car parts supplier Webasto, which has been working with its creditors on a €1.5bn amend-and-extend (A&E) deal, have been drawn out by a standoff between bank lenders and OEMs.

Tensions between the two sides have grown increasingly sharp, with both struggling to agree on key concessions. In particular, one major OEM customer has been reluctant to accept certain terms of the deal, creating a bottleneck that has delayed the finalisation of the agreement, as 9fin has recently reported.

OEMs in the courtroom

Matters can become even more challenging when OEM influence is brought to bear in an in-court restructuring rather than an out-of-court negotiation. This has been the case with auto components manufacturer Marelli, whose largest unsecured creditors — OEMs Stellantis and Nissan — are owed $454m and $313m, respectively.

The company, founded in Italy as a joint venture between Fiat and Ercole Marelli and acquired by KKR’s Calsonic Kansei in 2019, has been facing mounting financial strain from weakening demand, tight liquidity, and steep tariffs. In June, Marelli filed for Chapter 11 bankruptcy protection in the US, seeking to restructure its large debt pile.

In an out-of-court negotiation Marelli could privately arrange bespoke supply and repayment terms with its OEMs without much scrutiny, but in Chapter 11 every creditor’s rights, claims, and proposed treatment are subject to court oversight and public filings.

This means any preferential terms sought by Nissan or Stellantis — such as guaranteed supply, accelerated repayment, control over certain plants, and so on — would need to satisfy the US bankruptcy code’s “fair and equitable” standard and withstand challenges from other creditors.

Moreover, even though Chapter 11 freezes immediate retaliation through the “automatic stay”, OEMs can still leverage their creditor votes on the reorganisation plan to pressure Marelli into supply chain and other concessions.

In a situation like this, with two OEMs among the largest creditors, there is also the potential for dynamics resembling lender-on-lender violence. In such a case, each OEM might attempt to secure more favourable terms for itself by offering the supplier competing rescue or support packages. By contrast, the pair could join forces to give each other certainty over supply lines, at the expense of non-OEM creditors.

Another notable court case involving decisive OEM participation has been the restructuring of car battery supplier Varta under Germany’s StaRUG framework.

In this deal, Volkswagen-owned carmaker Porsche acted both as a financial backer, injecting, together with Varta’s main shareholder Michael Tojner, €120m (€60m in equity and €60m in debt financing), and as a strategic acquirer, taking control of Varta’s subsidiary V4Drive (now V4Smart) in March 2025.

As part of the deal, Varta executed a capital reduction to zero, effectively eliminating all previously issued shares. Minority shareholders were heavily diluted or wiped out entirely under a court-approved cross-class cram-down. As a result, they received no compensation, fuelling criticism that their rights were nullified and that they were treated less favourably than creditors, or majority stakeholders.

However, their legal appeals were rejected at multiple levels, first by the Regional Court of Stuttgart and ultimately without merit by the Federal Constitutional Court.

While legally permissible, the restructuring was seen by some as a pre-arranged transfer of the company to its largest customer and new majority shareholder without compensating others, and as a covert takeover procedure that enables majority owners and new investors to gain ownership over a company without shareholder approval or compensation.

The perfect storm

With the automotive crisis in full swing, the restructurings of auto parts suppliers have become even more challenging as many OEMs have themselves been hit hard by the downturn and are contending with their own operational and financial strains.

Both Nissan and Stellantis, for instance, are in the midst of restructuring efforts. Nissan is rolling out sweeping cost-cutting measures, comprising plant closures and 20,000 job cuts across multiple regions, including Europe, as part of a broader turnaround strategy.

Stellantis is likewise pursuing a large-scale restructuring plan involving thousands of layoffs and production halts at several facilities. The group reported a €2.3bn loss for the first half of 2025, and CEO Antonio Filosa has warned of “tough decisions” ahead, to stem losses and restore profitability.

Several other OEMs are facing similar financial pressures. Volkswagen plans to cut more than 35,000 jobs by 2030 as part of a drive to achieve €15bn in annual savings, while Ford is trimming its European workforce as it tries to develop a more cost-competitive structure.

OEM margins could come under further strain in 2025 and beyond, according to a recent Bain & Co report, as persistent inflation and high interest rates suppress demand, raise costs, and drive down prices. In response, many OEMs have already launched efficiency programmes including a reduction of material costs, that will put additional pressure on suppliers.

For these suppliers, the picture is even bleaker: a growing number are expected to face liquidity crunches in the coming months, likely requiring extraordinary support from OEMs to avoid insolvency. Adding to the strain, escalating trade tariffs threaten to further erode margins, particularly for globally exposed supply chains, thus creating a perfect storm for both OEMs and suppliers.

Among the auto suppliers most exposed is ZF, which incurred a €1bn net loss in 2024, including €600m of restructuring costs. The company is undertaking significant restructuring measures, with plans to cut 14,000 jobs in Germany by 2028. In the first half of 2025, sales fell 10%, and management warned of further “painful decisions” ahead.

ZF is also facing multiple lawsuits from OEMs — including Hyundai, Kia, Fiat Chrysler, Toyota, Honda, and Mitsubishi — alleging that roughly 15 million vehicles were fitted with defective airbag control units that could fail to deploy in a crash.

In the coming months, OEM sourcing choices will play a decisive role in shaping ZF’s order volumes and production. For the company and other struggling auto parts suppliers, any move by automakers to cut volumes or shift programmes could swiftly erode revenues, undermine manufacturing efficiency, and worsen liquidity strains — making OEM decisions a key driver in the escalation of their crisis.