Japan’s three megabanks raised their loan-loss provisions for Marelli during the October-December quarter, the sources said.
Representatives for Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and DBJ declined to comment.
High fixed costs
Just three months after rolling out a restructuring program in September, Marelli doubled its planned job cuts to more than 3,000 and shut down some locations.
In the note to employees last year, Paliwal said the company has “the highest fixed cost among our competitors.” To generate $1 of gross margin, Marelli spends $2.72, compared with 9 cents to 66 cents at its rivals.
“This is not economically acceptable,” he wrote in the note. “Unfortunately, there is no alternative — decisive measures are needed to make our company fit for the future.”
KKR spokeswoman Anita Davis said: “KKR believes in Marelli and its worldwide team, and fully backs their work to deliver reliable, high-quality and innovative components for its customers globally.”
KKR will continue to support Marelli “as it works to position itself as an automotive leader for the future, notwithstanding the current challenges the industry is facing globally,” she said.
Hiroshi Watanabe, a spokesman for Marelli, which is not listed, declined to comment.
A representative for Mizuho declined to comment. A representative for Stellantis did not respond to a request for comment.
Nissan spokeswoman Azusa Momose said: “Parts suppliers are important partners for Nissan and we have been working with them as needed.”
