Collins & Aikman – once one of the top 15 US auto suppliers – is closing after completing the sale of its last major operations to private equity group International Automotive Components led by billionaire Wilbur Ross.
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The Associated Press (AP) noted that the supplier, which once supplied parts for almost every Big Three-made car, got into trouble under the leadership of ex-Reagan administration budget director David Stockman, who took it on an expansion drive on the eve of a big downturn in the US auto industry and is now awaiting trial on charges of hiding the company’s woes from investors.
Last week, IAC bought the soft trim operations of Collins & Aikman, which has been operating under Chapter 11 bankruptcy protection for two years.
Auto analyst David Cole told AP the 116-year-old company got into trouble by going on a buying binge with borrowed money earlier in the decade. Company executives, he reportedy said, gambled that the auto industry’s problems weren’t as serious as they proved to be – and lost.
As reported by just-auto, IAC said in a statement last week that the acquisition of C&A’s soft trim division included 16 facilities in North America that manufacture carpeting, moulded flooring products, dash insulators and other related interior components. Additionally, the acquisition included a noise, vibration and harshness (NVH) technical centre. The C&A division had 3,900 employees.
The Saltillo facility manufactures injection moulded components, including instrument panels, doors, fascias and interior trim. The 156,000 square foot facility opened in 1995 and has 250 employees.
IAC NA chairman Wilbur Ross said at the time: “We have been trying to buy these operations ever since C&A filed for bankruptcy because strategically they give us a major position in the automotive carpet and acoustics sector and strengthen our Mexican manufacturing base.”
The new owners had no immediate plans for job cuts, spokesman David Ladd told the Associated Press.
C&A was formed in 1891 as an upholstery manufacturer and, in 2005, provided automotive flooring, fabric, instrument panels and other equipment to General Motors, Ford and Chrysler, as well as to Toyota, Honda and Nissan Motor. Its products appeared in 90% of the vehicles sold in North America, according to AP.
Spokesman David Youngman, whose final day of work was last Friday, told the news agency the sale to IAC covered the last remaining significant operations, and the Southfield-based company would proceed to liquidate and make payments to creditors.
Neither company disclosed the price, but it was listed as $US134m in regulatory proceedings before the European Commission, the news agency added.
A federal indictment unsealed in March accused former chairman Stockman and four other ex-officials of widespread fraud that concealed the company’s financial problems before it filed for bankruptcy. Stockman has denied the charges, the Associated Press said.
Stockman resigned a week before the bankruptcy filing, the report added.
