(Updates with analyst comment in graphs 7-9, bond prices and ratings change in graphs 16-18.)

By Patrick Fitzgerald and Terry Kosdrosky

Of DOW JONES NEWSWIRES

DETROIT -(Dow Jones)- Dura Automotive Systems Inc. (DRRA) filed for Chapter 11 protection Monday in U.S. Bankruptcy Court in Wilmington, Del., the latest auto supplier to seek refuge in bankruptcy amid difficult times in the auto industry.

The Rochester Hills, Mich., company joins more than a half-dozen major suppliers - most notably Delphi Corp. (DPHIQ), Dana Corp. (DCNAQ), Collins & Aikman Corp. (CKCRQ) and Tower Automotive Inc. (TWRAQ) - that have sought bankruptcy protection.

Only Dura's U.S. and Canadian subsidiaries filed for Chapter 11, while the company's other foreign operations - which account for about 51% of its revenue - were not part of the filing. Dura listed assets of about $2 billion and debts of $1.7 billion.

The company's financial woes have been caused by a combination of production cuts from U.S. auto makers, high raw material prices and a high debt load.

Production cuts from General Motors Corp. (GM), Ford Motor Co. (F) and DaimlerChrysler AG's (DCX) Chrysler Group have stressed suppliers, who find it difficult to adjust to unexpected drops in volume. A market shift away from pickup trucks and sport utility vehicles also has hurt, as suppliers and auto makers earn better margins on those products.

Chrysler cut production by 25% in the third quarter, GM said it will cut fourth-quarter North American production by 12%, and Ford plans a 21% cut in fourth-quarter production. Additionally, Ford confirmed Monday that it plans to further cut production by 8% to 12% in the first half of 2007.

Jim Gillette, director of supplier analysis for CSM Worldwide Inc., said it's difficult for suppliers, especially those with a lot of debt, to adjust to such production cuts. That's because making auto parts requires a lot of fixed costs, such as tooling, that can't be taken out fast enough.

"It's extremely expensive, these on-again, off-again production schedules, and it just kills the income statement for these suppliers," Gillette said. "In North America over the next several months, we're going to see a lot of fixed assets standing still, and when you're margins are quite thin, that can be disastrous for a supplier."

Gillette said he predicts more Chapter 11 supplier filings in the next couple of years. CMS Worldwide is a research and consulting firm based in Farmington Hills, Mich.

But it was Dura's highly leveraged financial situation, and its failure to pay interest on its debt, that prompted its bankruptcy filing, Dura Chief Financial Officer Keith Marchiando said in court papers.

"The company is not able to generate sufficient cash flow from operations to service its indebtedness and to meet other obligations," Marchiando said.

Dura owes its bondholders about $988 million. Earlier this month, the company missed a $17.25 million interest payment. Another $24 million interest payment was due Wednesday. The company's available cash shrunk to $16.2 million in October from $219.3 million in July.

Filing Was Anticipated

Dura said a lending group led by Goldman Sachs Capital Partners, General Electric Capital Corp. and Barclays Capital have agreed to provide the company with $300 million to fund business during its Chapter 11 case.

Speculation had swirled regarding a possible Dura Chapter 11 filing since the company swung to a second-quarter net loss of $131.3 million, or $6.96 a share. Reports also surfaced this summer that Dura was working with Miller Buckfire & Co. and Glass & Associates, two firms that typically advise distressed companies.

Dura's stock has lost much of its value and has traded under $1 since July 27. Shares were recently down a penny at 28 cents.

Dura bonds, meanwhile, fell after Monday's filing. The company's 8.625% notes due 2012 were recently down 2.5 points, or cents on the dollar, trading at 30.65 points, according to online corporate bond trading platform MarketAxess. Dura's 9% notes due May 2009 were off more than a point at 6.4 points.

"It was definitely expected," said a trader of the Chapter 11 filing. "It was priced into the bonds."

Ratings firm Standard & Poor's dropped Dura ratings on Monday deeper into junk territory, lowering its senior unsecured and subordinated debt ratings to D from CC, its lowest possible rating, signifying default. The corporate-credit rating and rating on Dura's $400 million senior notes were already set at D, S&P noted, following the recent failure to make an interest payment.

Dura launched a restructuring plan, dubbed "50 Cubed," in February. The cost- cutting plan involved the closure of five to 10 plants worldwide and moving more production to countries with lower labor costs.

In July, as Dura reported the second-quarter loss, the company said it would step up the plan and cut 510 non-manufacturing jobs by year's end.

Dura's two largest shareholders are Dimensional Fund Advisors, which owns an 8.54% stake, and Barclays Global Investors N.A., which owns an 8.67% stake.

Auto suppliers have drawn more interest lately from private equity firms and hedge funds, a possible indication there's confidence the struggling sector can be turned around.

Several firms and hedge funds are vying for control of Delphi, and Visteon Corp. (VC) has drawn interest from hedge fund Pardus Capital Management. Lear Corp. (LEA) recently closed a private stock placement with funds controlled by investor Carl Icahn, who is set to become the supplier's largest shareholder.

Among Dura's first-day requests in its bankruptcy case, the company wants court approval to pay its employees and its critical vendors. It also wants permission to tap $50 million of its $300 million debtor-in-possession loan. A company spokesman said a hearing had not yet been scheduled.

Dura employs more than 7,100 people in the U.S. and Canada and had annual sales of $2.23 billion in 2005. The company makes pedal systems, door and window systems and automotive trim. The company's major customers include Ford, GM, Lear and Volkswagen (G.VOW).

Law firm Kirkland & Ellis will handle Dura's bankruptcy case.

The case number is 06-11202. A judge has yet to be assigned the case.

-Patrick Fitzgerald, Dow Jones Newswires; 202-862-3544; patrick.fitzgerald@ dowjones.com; and Terry Kosdrosky, Dow Jones Newswires; 313-226-1251; terry.kosdrosky@dowjones.com

(Marine Cole contributed to this report.)