Dec. 12 (Bloomberg) -- Chrysler LLC, with its cash dwindling as sales slump, has been asked to pay in advance by some suppliers concerned that the third-largest U.S. automaker will go bankrupt.

Chrysler rejected one partsmaker and is negotiating with others, said two people familiar with the matter, who asked not to be identified because negotiations are private.

A number of “rogue suppliers” sought to get cash upfront from Chrysler, Chief Financial Officer Ron Kolka said yesterday in an interview. “We have had a lot of suppliers come in and threaten us for advanced payment, but we can’t,” he said.

Pressure for such payments puts Chrysler in the same bind as General Motors Corp., which also is being asked for cash for parts, people have said. Both automakers had staked their survival plans on the $14 billion short-term rescue plan that failed in the Senate late yesterday.

As Chrysler’s talks with suppliers progressed, the company said John Campi, senior vice president and chief procurement officer, resigned for “health-related reasons.” He joined the automaker in January after working in a similar role at Home Depot Inc. with Chrysler’s current Chief Executive Officer Robert Nardelli.

Scott Garberding, vice president of global operations, was named to replace Campi, said spokeswoman Shawn Morgan.

The supplier discussions with Chrysler include proposals to the Auburn Hills, Michigan-based company for prompter payments than it makes now, said the two people, who wouldn’t name the companies. Payment 45 days after delivery is standard for partsmakers.

Concern for Survival

Auto suppliers are making a run on banks to “draw down lines of credit” because of concerns about automaker production, Kimberly Rodriguez, head of Grant Thornton LLP’s automotive restructuring group in Southfield, Michigan, said today in an interview with Bloomberg Television.

“Many of them are afraid they won’t get to January due to production slowdowns,” she said, without naming specific companies.

Chrysler has been battered by a 28 percent plunge in U.S. sales through November, the steepest drop among major automakers. It ended the third quarter with $6.1 billion in cash and needs at least $3 billion on hand to operate, Chief Executive Officer Nardelli told Congress on Nov. 18.

Nardelli had asked for a total of $7 billion in short-term loans and $6 billion more in borrowing from an Energy Department program to help retool factories to build more-efficient vehicles. In exchange, he pledged to cut costs and boost fuel economy at the U.S. automaker most dependent on light trucks.

Senator’s View

Lawmakers including Senator Bob Corker, a Tennessee Republican, said in hearings last week that Chrysler isn’t viable as a standalone company and probably should file for bankruptcy or be merged with GM. The company is controlled by buyout firm Cerberus Capital Management LP, which bought an 80.1 percent stake in 2007 from Daimler AG.

Partsmakers are at risk from a Chrysler collapse, said Michael Robinet, an analyst at consulting firm CSM Worldwide Inc. in Northville, Michigan.

The best scenario for Chrysler is a government-controlled “wind down,” where valuable properties are sold and others closed, Robinet said in a Dec. 10 speech in Detroit. Under that outcome, more jobs would be saved and the effect on the suppliers would be less than if Chrysler simply shut down.

Chrysler isn’t considering winding down operations, President Tom LaSorda said in an interview before the rescue plan collapsed in the Senate. “We’re going to bounce back,” he said.

Bankruptcy Forecast

As many as 25 percent of North American suppliers may file for bankruptcy or liquidate, another CSM analyst, Jim Gillette, said yesterday at an Automotive Press Association event in Detroit. He estimated that as many as 100,000 supplier jobs may disappear in the next two years.

Suppliers’ payment requests to Detroit-based GM began in the last several weeks and haven’t disrupted vehicle production, a person familiar with the matter said.

The automaker has rejected requests to pay cash immediately for parts, which so far come from a fraction of its 3,600 suppliers, said people familiar with the matter, who asked not to be identified because the discussions are private.

The people wouldn’t say how many partsmakers had made the requests, nor would they identify the companies. No suppliers have announced that they’re requiring payment in advance.

As recently as Nov. 25, GM Purchasing Vice President Bo Andersson told trade publication Automotive News that suppliers weren’t seeking payment in advance or shorter turnarounds on invoices.

To contact the reporters on this story: Alex Ortolani in Southfield, Michigan, at aortolani1@bloomberg.net; Mike Ramsey in Southfield, Michigan, at mramsey6@bloomberg.net

Last Updated: December 12, 2008 17:22 EST