 Automotive Supplier Marelli Files for Chapter 11 Bankruptcy Amid Tariff PressuresShelbyville NOW Special Report Marelli’s CEO, David Slump, pointed to tariffs as the “tipping point” for the company’s financial woes, exacerbating issues from high fixed costs and underperforming electric vehicle contracts. “While we’ve made progress on profitability, industry-wide pressures have created a liquidity gap that requires action,” Slump said in a statement. The filing follows a failed 2022 debt restructuring attempt in Japan and comes amid broader automotive industry struggles, including declining sales and the costly shift to electric vehicles. The company secured $1.1 billion in debtor-in-possession financing, with $519 million already court-approved, to support operations during the bankruptcy process. Marelli emphasized that it will continue paying employee wages, benefits, and suppliers without disruption. No layoffs are planned, and customer programs will proceed as normal, according to court filings. Marelli owes significant debts to major automakers, including $453 million to Stellantis and $313 million to Nissan. Other creditors include Bosch Group, Mazda, Tesla, and BASF. The restructuring plan, backed by 80% of senior lenders, aims to convert debt to equity, potentially transferring ownership to lenders like Strategic Value Partners LLC. An overbid process allows other firms, such as India’s Motherson Group, to bid for Marelli within 45 days. Formed in 2019 through the merger of Calsonic Kansei and Magneti Marelli, Marelli employs over 50,000 people across 170 facilities worldwide and reported $10 billion in revenue in 2024. Despite its scale, the company faced severe disruptions during the COVID-19 pandemic, which forced plant closures and a workforce reduction of approximately 18,600 employees. Industry analysts warn that Marelli’s bankruptcy could signal further distress for automotive suppliers, particularly as tariffs continue to strain global supply chains. “This is a wake-up call for the industry,” said automotive analyst Jane Takahashi. “Suppliers are caught between rising costs and shrinking margins.” Court proceedings began with a first-day hearing on June 12, 2025, before Judge Brendan Shannon, with a final approval hearing scheduled for July 16, 2025. More details are available at www.marelliforward.com, with claims managed by Verita at www.veritaglobal.net/Marelli. Nissan, a key client, expressed support for Marelli’s efforts to minimize disruption, signaling confidence in the supplier’s restructuring plan. As Marelli navigates Chapter 11, the automotive industry watches closely, bracing for potential ripple effects. Who Really Pays for U.S. Tariffs on Foreign Imports?BY: Shelbyville NOW - July 9, 2025 The Basics: Importers Pay, but There’s a CatchWhen goods like clothing from China or auto parts from Mexico arrive at a U.S. port, the importer—usually a U.S. company—pays the tariff to U.S. Customs and Border Protection (CBP). The CBP uses the Harmonized Tariff Schedule to determine the rate, based on the product’s value and origin. In 2022, these tariffs generated about $80 billion for the U.S. Treasury, a tidy sum for the government. But here’s where it gets interesting: just because importers pay the tariff doesn’t mean they bear the full cost. Like any business expense, they try to pass it on. How much they can shift depends on market forces like competition and consumer demand. Consumers Feel the PinchMore often than not, you, the consumer, end up paying. A 2019 study by the National Bureau of Economic Research found that U.S. consumers shouldered about 90% of the cost of tariffs on Chinese goods during the 2018–2019 trade war. Why? If demand for a product—like smartphones or sneakers—is strong and there aren’t many alternatives, importers can raise prices without losing customers. Suddenly, your new phone costs $50 more, and you’re indirectly paying the tariff. Foreign Exporters Share the BurdenIt’s not always a one-way street. Foreign exporters, like Chinese manufacturers, sometimes lower their prices to stay competitive in the U.S. market. This happened during the U.S.-China trade war, where some Chinese firms cut prices to offset tariffs. But their ability to do this depends on how flexible their costs are and how much competition they face. If they can’t afford to cut prices, they risk losing market share. Businesses Get Squeezed TooAmerican companies that rely on imported goods—like manufacturers using foreign steel—also take a hit. Higher costs for raw materials can mean slimmer profits or pricier products. Some businesses, like Walmart or Apple, have responded by shifting suppliers to countries like Vietnam to dodge tariffs, but that’s not cheap or easy. A 2020 Peterson Institute for International Economics study highlighted how these supply chain shifts added costs and complexity for U.S. firms. What Decides Who Pays?The split of tariff costs hinges on a few key factors:
A Real-World Example: The China TariffsTake the Section 301 tariffs on Chinese goods starting in 2018. U.S. importers paid the tariffs upfront, but studies showed consumers bore the brunt through higher prices on electronics, clothing, and more. Some Chinese exporters cut prices to stay competitive, and companies like Apple rerouted supply chains to countries not hit by tariffs. The result? Higher costs for everyone and a reshuffling of global trade. Why It MattersTariffs aren’t just a government policy wonk’s problem—they affect your wallet, the economy, and global trade. They can protect American jobs by making foreign goods pricier, but they also raise costs for consumers and complicate business operations. Policymakers need to weigh these trade-offs carefully. What’s Next?To soften the blow, the government could monitor how tariffs hike consumer prices and offer support to businesses caught in the crossfire. Clear communication about tariff impacts would also help consumers and companies plan better. For now, the next time you hear about a new tariff, know that it’s not just importers writing the check—it’s likely you, too, at the cash register. Sources:
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