Fitch affirms three U.S. auto suppliers

Fitch Ratings said it removed the ratings of American Axle & Manufacturing Holdings, Inc. (CCC/stable), Tenneco Inc. (B-/stable) and TRW Automotive (B-/stable) from Rating Watch negative and affirmed them.

The ratings of ArvinMeritor Inc., including its CCC issuer default rating, remain on Rating Watch negative.

This concludes the Rating Watch on U.S. auto supplier that began Dec. 11, 2008 due to concerns about possible bankruptcies by General Motors Corp. and Chrysler LLC. Following the bankruptcies by the two automakers, the Rating Watch remained in effect due to concerns about post-bankruptcy vehicle volumes at GM and Chrysler.

Both GM and Chrysler emerged from Chapter 11, and the extended production shutdowns are complete, Fitch said, adding that the auto supply base has not faced serious disruptions despite some bankruptcies such as Hayes-Lemmerz International, Lear Corp., Metaldyne Corp. and Visteon Corp.

The agency continues to view the global automotive environment as challenging in the near term. On a longer-term basis, Fitch believes the suppliers should benefit from the significant restructuring actions taken before and during the global automotive slump.

The agency said ArvinMeritor remains on Rating Watch given Fitch's view that the company continues to face significant risks in its ability to execute the divestiture of the remaining assets in the light vehicle segment, which have been a significant use of cash; the potential need for an amendment for covenant relief for the quarter ending Sept. 30; and ongoing weakness in truck demand in Europe.

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