Interiors specialist Collins & Aikman Corporation will exit the automotive fabrics business, pending approval by the US Bankruptcy Court.
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The action will affect three plants in Roxboro, North Carolina, as well as plants in Farmville, NC, and El Paso, Texas that will continue to operate as the business is sold to other suppliers.
This will affect approximately 1,200 Collins & Aikman employees. During the exit process C&A will continue to evaluate the potential sale of certain portions of the fabrics business to interested parties while working to ensure seamless transition for its customers.
“Despite the tremendous efforts of those within our fabrics operations to reduce costs and improve productivity, this segment of our business has simply been unable to compete. Certain styles of textiles heavily invested by the company have fallen out of favor with consumers, raw material prices have escalated and manufacturing has moved outside the United States,” said Gerald Jones, executive vice president of the fabrics business. “In the coming months, we will work diligently to ensure our employees impacted by this event are treated fairly, and to fully support our customers as they transition to other suppliers.”
Frank Macher, president and CEO of Collins & Aikman, added: “A key component of our reorganisation strategy is to ensure our asset portfolio consists of high-potential businesses in our core competencies that can consistently deliver acceptable returns. Exiting the unprofitable automotive fabrics business is a difficult decision, but in spite of our efforts, it is a necessary action for the sake of the enterprise.”
Certain aspects of exiting the fabrics business require court approval and the company intends to seek such authority when appropriate.
