Marelli, a major Japanese-Italian auto parts supplier and a key partner to automakers such as Nissan and Stellantis, has officially filed for Chapter 11 bankruptcy protection in the United States. The announcement came on Wednesday, June 11, 2025, marking a pivotal moment for the company as it seeks to restructure amid mounting financial pressures.
Founded in 2019 through the merger of Italy’s Magneti Marelli and Japan’s Calsonic Kansei, Marelli has grown into a global powerhouse, employing more than 50,000 people and operating around 170 facilities worldwide. The company supplies essential components including lighting systems, air conditioning units, electric motors, and suspensions, playing a critical role in the automotive supply chain.
Despite its size and reach, Marelli has been grappling with severe challenges that have eroded its financial stability over recent years. The lingering effects of the COVID-19 pandemic disrupted global supply chains and slashed production, creating a volatile demand environment for automakers and their suppliers alike. Rising inflation, labor shortages, and soaring raw material costs compounded these difficulties, squeezing margins and forcing tough decisions.
Chief Executive Officer David Slump highlighted the impact of the trade environment in a court filing, stating, "Marelli was severely affected by tariffs due to its import/export-focused business and the imposition of tariffs specifically against automotive manufacturers and suppliers." These tariffs, introduced in March under the Trump administration, targeted imported cars and certain auto parts, significantly increasing costs for companies like Marelli. Although a U.S. Court of International Trade panel later ruled that the president had exceeded his authority in imposing these tariffs, the damage to Marelli’s financial position had already been done.
Slump further explained that the company’s financial position began to deteriorate more sharply in spring 2025, citing "macroeconomic headwinds associated with the imposition of tariffs in countries around the world." This reality, combined with lingering supply-chain disruptions, prompted the decision to seek Chapter 11 bankruptcy protection as a strategic move rather than a sign of collapse.
Filing for Chapter 11 allows Marelli to continue operating while it reorganizes its finances and reduces its debt burden. The company has secured a commitment of $1.1 billion in debtor-in-possession (DIP) financing from a consortium of lenders, which is expected to provide sufficient liquidity to support operations throughout the bankruptcy process. Approximately 80 percent of Marelli’s lenders have signed agreements backing the restructuring plan, signaling strong financial support and confidence in the company’s future viability.
Among these lenders are notable financial institutions such as Deutsche Bank AG, Mizuho Financial Group Inc., and investment firms including Seoul-based MBK Partners Ltd. and New York’s Fortress Investment Group LLC. Additionally, global investment firm Strategic Value Partners LLC, led by Victor Khosla, is poised to become the new owner of Marelli as part of the restructuring deal. KKR & Co., the private equity firm that originally merged Calsonic Kansei and Magneti Marelli to form Marelli in 2019, will transfer its shares to the lenders’ consortium.
Slump emphasized the company’s commitment to its customers and partners throughout this process, stating, "Taking this action now provides access to new liquidity to fund our long-term growth and innovation pipeline, and ensures our customers and partners all over the world can continue to rely on Marelli for on-time delivery of advanced technologies that shape the vehicles of the future." He also reassured stakeholders that the bankruptcy filing would not disrupt Marelli’s business operations, noting, "As we move through this process, we will continue to serve our customers and work with our suppliers and partners as they have come to expect." Furthermore, the bankruptcy proceedings are focused on Marelli’s U.S. operations and do not directly affect its global subsidiaries.
The restructuring effort comes amid a broader upheaval in the automotive industry. The shift toward electrification and automation is forcing carmakers to rethink strategies as sales decline in key markets and supply chains become more complex. Suppliers like Marelli are under intense pressure to adapt quickly, often facing shrinking margins and the need to invest heavily in new technologies.
Industry analysts caution that Marelli’s bankruptcy could have ripple effects throughout the automotive sector, particularly if supply contracts are renegotiated or disrupted during the restructuring. However, major automakers such as Nissan and Stellantis are reportedly monitoring the situation closely and have not announced any changes to their supplier relationships. Marelli has pledged to honor existing agreements, aiming to maintain stability amid uncertainty.
Looking back, Marelli’s financial woes first became public in 2022 when the company filed for court-led rehabilitation with a staggering debt of approximately ¥1.1 trillion ($7.6 billion), the largest ever recorded for a Japanese manufacturer. Since then, the debt has been reduced to around ¥650 billion, but continued challenges made a more comprehensive restructuring necessary.
With the new Chapter 11 filing, Marelli plans to submit a detailed reorganization proposal in the coming weeks. This plan aims to deleverage the company’s balance sheet, improve liquidity, and position Marelli for long-term success in a rapidly evolving industry.
While the road ahead involves difficult decisions, the substantial lender support and fresh financing highlight the confidence investors and partners still have in Marelli’s potential. The company’s strategic use of bankruptcy protection reflects an effort to regain control, innovate, and remain a vital player in the global automotive supply chain.
In a sector where change is the only constant, Marelli’s journey underscores the challenges suppliers face and the resilience required to navigate an uncertain future.
