Investors in major auto parts suppliers stand to benefit if a U.S. bailout staves off bankruptcy for U.S. automakers and prevents a cascade of failures in the supply base, according to analysts. "The suppliers would benefit tremendously from new capital coming into the industry and from providing assurances of the supply of trade credit," Fitch Ratings managing director Mark Oline told Reuters last week.

"If the government provides assurance that GM, Ford and Chrysler can meet their bills, that provide confidence and willingness to extend trade credit throughout that chain," Oline said.

Suppliers such as Lear Corp and ArvinMeritor Inc, whose balance sheets have been already strained by tighter credit and plunging auto production, have taken a further hit in recent weeks by concerns they may not get paid if their major customers are pressed to the brink of failure.

Analysts say any form of government aid for automakers – a bailout or even a government-guaranteed bankruptcy – could spark a rally in beaten-down auto supplier stocks on hopes that suppliers will recover their accounts receivables and be able to finance future shipments.

KeyBanc Capital Markets analyst Brett Hoselton said shares potentially set for a bounce in the event of a GM bailout include those of Lear, ArvinMeritor, American Axle & Manufacturing Holdings Inc, TRW Automotive Holdings Corp and Visteon Corp.

"The fact that Congress agreed to reconvene out of session during the early part of December clearly demonstrates a significantly higher level of commitment toward "bailing out" the automakers ... which may result in an auto supplier stock rally," Hoselton said in a research note on Monday.

While dismissing the possibility of a "blank check" being sent to Detroit, U.S. lawmakers agreed last week to give the automakers another chance to make their case for a rescue, asking them to submit restructuring plans by Dec. 2. Congress is scheduled to reconvene out of session in the week of Dec. 8 to review the plans and consider aid.

"Even if one automaker has to file [for bankruptcy], I think the domino effect will be disastrous to the supply community and it could very well take one of the other automakers out," said Jim Mallak, former chief financial officer of parts maker Tower Automotive, which was taken private by Cerberus Capital Management last year.

"That comes about because there are so many common suppliers throughout the entire industry," Mallak, managing director at restructuring advisory Alvarez and Marsal.

The financial strain on parts suppliers also has the potential to create additional pressure on automakers as suppliers tighten payment policies to ensure they get paid. Although suppliers and their investors could be the biggest beneficiaries of a bailout, the outlook is dim for the sector if Congress fails to extend aid and one or more major automakers file for bankruptcy, analysts said.

If a bailout fails to materialise, auto suppliers will be forced to cut 275,000 jobs immediately, according to a survey of 275 supplier executives released on Tuesday by Planning Perspectives.

Analysts had estimated that about a third of U.S. parts suppliers were at risk of failure even before the latest credit crisis and the downturn in sales to 25-year lows last month.

"If you are very close to a bankruptcy state now, the filing of one of their major customers will only make things worse for them," Mallak said. "I don't think you can afford to start toppling the (supply) industry."